This year has been big for the cryptocurrency sector when it comes to mass adoption. A recent report from Grayscale Investments shows that more than a quarter (26%) of US investors have examined their Bitcoin (BTC), up from 23% in 2020. With the holiday season approaching, financial services provider MagnifyMoney has also found that almost two-thirds of the surveyed Americans hope to receive a cryptocurrency gift this year.

While the growth of cryptocurrencies has been remarkable, there has also been an increase in fraud in digital assets. The chainalysis blog on the company’s report on cryptocurrency for 2022 says that this year fraud was the dominant form of cryptocurrency in terms of transaction volume. The report notes that worldwide, more than $ 7.7 billion in cryptocurrencies have been received from fraud victims. According to previous research from Chainalysis, this figure is 81% higher than in 2020, the year in which fraudulent activity decreased significantly compared to 2019.

Source: Chainalysis
Fraud is the biggest threat to building trust in cryptocurrency
Kim Grauer, head of research at Chainalysis, told the Cointelegraph that although there are many different crimes related to cryptocurrency, fraud has become the biggest in terms of value that criminals receive. She added that fraud poses a serious threat to building trust in the crypto ecosystem, as it may prevent people from investing in digital assets.

Grauer also mentioned that there has been an increase in decentralized financial (DeFi) fraud this year. With annual revenues of $ 5 billion from all DeFi protocols, this should come as no surprise. But most interesting is that the Chinese found that the “food craving” contributed to the increase in fraudulent income this year. According to Grauer, Chainalysis defines vibration as when a person or developer suddenly decides to end a project and escape with funding:

High-risk scams have increased the number of scams in the crypto area this year. In addition to financial fraud, fraudsters have exploited many weaknesses in the crypto area. In total, they took $ 2.8 billion in cryptocurrency. ”
While carpeting is a relatively new crime, Grauer believes such incidents are becoming commonplace in the growing DeFi ecosystem. To put this in perspective, a blog post from Chainalysis notes: “The carpet has become a pervasive scam in the DeFi ecosystem, accounting for 37% of the total proceeds of crypto fraud in 2021, up from just 1% in 2020.”

The chainalysis blog post also provides examples of some of the biggest mistakes in the history of 2021. For example, the AnubisDAO case was cited as the second largest carpet recovery this year, with cryptocurrency worth over $ 58 million stolen. According to the post, AnubisDAO was launched on October 28, 2021 with a statement to offer a decentralized currency supported by a number of assets. However, the project had no website or official document, and all developers used pseudonyms. Miraculously, AnubisDAO managed to raise almost $ 60 million overnight, but after 20 hours, all the money had disappeared from AnubisDAO’s liquidity pool.

While AnubisDAO shows widespread use of DeFi rugs, new cases are emerging almost daily. One of the first anonymous Ethereum and DeFi investors told Cointelegraph that they were the target for the money on December 19, 2021. An anonymous source said that the project is called “up1.network”, and noticed that several early Ethereum investors discussed Up1 on and Discord chat. they added:

“People I trusted mentioned the project, so I checked it out. I thought it was weird watching Up1 distribute airdrop, but I thought it might have something to do with my DeFi token. Then I connected to my MetaMask wallet and clicked on the get giveaway button, but I kept getting an error message. I did this three times and gave the project access to my account. ”
Unfortunately, when Up1 gained access to his account, three DeFi tokens worth $ 50,000 were immediately stolen. They noted: “I blocked access to Etherscan after they could no longer steal tokens.” Then an Ethereum investor investigated the DeFi platform Zerion, where he then announced that DeFi tokens had left his wallet. Zerion also gave them the address of the wallet the money went to, as well as a message:

Source: CoinTelegraph

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