Chainalysis, a blockchain analytics business, released a new report focused on illegal activity on blockchains, finding that DeFi protocols are the most common target for hackers, and that money laundering in the area has increased in the last two years.
DeFi as a primary target for hackers
Illicit DeFi transactions have continuously increased since the DeFi Boom in the summer of 2020. According to Chainalysis’ study, money laundering and DeFi hacking have been the two most common illegal activities using such protocols.
In 2022, criminals stole $1.7 billion in digital assets, with DeFi protocols accounting for 97 % of the total. The $600 million Ronin bridge breach in late March and the $320 million Wormhole attack in February were the main sources of the loot. According to the research, most stolen assets – over $840 million – have gone to hackers with ties to North Korea as of 2022.
Money laundering using DeFi protocols has expanded steadily in recent years, with DeFi protocols accounting for 69% of crypto-based monies related with illegal activity.
The paper ascribed the difficulties of tracking the flow of digital assets to the design of most such protocols, which allow users to trade one token for another. The absence of KYC requirements in most DeFi schemes has also made them more appealing to criminals.
The research referenced the example of the notorious Lazarus Group, which laundered $91 million in cryptocurrency on multiple protocols last year. The organization allegedly converted stolen tokens to ETH and BTC, then transferred them to centralized exchange accounts and cashed out the funds.
Wash Trading NFT
Another interesting section of the paper focused on NFT Wash Trading, a type of market manipulation that inflates an illiquid asset artificially. NFTs can be traded between wallets controlled by the same business, providing market players the false impression that demand for the asset is stronger than it is.
According to the research, one case has created over 650,000 wETH in transaction volume due to tampering. The events happened on the same platform, according to the report, since the marketplace offered incentive rewards for trading NFTs in the form of the platform’s native coin.
By just transacting more frequently between accounts, users can earn extra tokens. Meanwhile, NFT collectors may be misled into believing that the marketplace is busier than it is.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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CoinCu News
Author
Chainalysis, a blockchain analytics business, released a new report focused on illegal activity on blockchains, finding that DeFi protocols are the most common target for hackers, and that money laundering in the area has increased in the last two years.
DeFi as a primary target for hackers
Illicit DeFi transactions have continuously increased since the DeFi Boom in the summer of 2020. According to Chainalysis’ study, money laundering and DeFi hacking have been the two most common illegal activities using such protocols.
In 2022, criminals stole $1.7 billion in digital assets, with DeFi protocols accounting for 97 % of the total. The $600 million Ronin bridge breach in late March and the $320 million Wormhole attack in February were the main sources of the loot. According to the research, most stolen assets – over $840 million – have gone to hackers with ties to North Korea as of 2022.
Money laundering using DeFi protocols has expanded steadily in recent years, with DeFi protocols accounting for 69% of crypto-based monies related with illegal activity.
The paper ascribed the difficulties of tracking the flow of digital assets to the design of most such protocols, which allow users to trade one token for another. The absence of KYC requirements in most DeFi schemes has also made them more appealing to criminals.
The research referenced the example of the notorious Lazarus Group, which laundered $91 million in cryptocurrency on multiple protocols last year. The organization allegedly converted stolen tokens to ETH and BTC, then transferred them to centralized exchange accounts and cashed out the funds.
Wash Trading NFT
Another interesting section of the paper focused on NFT Wash Trading, a type of market manipulation that inflates an illiquid asset artificially. NFTs can be traded between wallets controlled by the same business, providing market players the false impression that demand for the asset is stronger than it is.
According to the research, one case has created over 650,000 wETH in transaction volume due to tampering. The events happened on the same platform, according to the report, since the marketplace offered incentive rewards for trading NFTs in the form of the platform’s native coin.
By just transacting more frequently between accounts, users can earn extra tokens. Meanwhile, NFT collectors may be misled into believing that the marketplace is busier than it is.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Annie
CoinCu News
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