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Cryptocurrency crimes hit a record high last year

Cryptocurrency crimes hit a record high last year

The total volume of cryptocurrency transactions increased to $15.8 trillion last year. This is an increase of more than 550 percent over the previous year.

Wallets associated with criminal activities are illegal addresses. These include, for example, ransomware that encrypts files or makes it impossible to use a computer, the so-called Ponzi system. This operates on the principle of fraud, sometimes referred to as the plane, in which the operator of the investment fund no longer invests the invested money, but pays the investors with the money of the people who invested them in it.

“Criminal abuse of cryptocurrencies creates huge barriers to further adoption, increases the likelihood of government-imposed restrictions, but worst of all, that its victims are innocent people around the world,” says Chainalysis.

The report also states that the increase in decentralized finance, or DeFi, has played an important role in theft and fraud. This is a technology that allows cryptocurrency to be loaned outside of traditional banking.

In 2020, approximately $162 million worth of cryptocurrency was stolen from DeFi platforms, or 31% of all stolen cryptocurrency. Compared to 2019, this is a 335 percent increase, and last year that number increased 1,330 percent to $2.3 billion, Chainalysis said.

Bitcoin and other virtual currencies

There are many virtual currencies. One of the oldest and most popular currencies currently is the so-called bitcoins. It was established in 2009, but has gained more popularity in recent years. This currency is designed so that it cannot be influenced by any government or central bank.

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Cyber ​​coins “mint” a network of computers with specialized software programmed to issue new coins at a steady but declining pace. The number of coins in circulation is expected to reach 21 million in the end, which is about 2,140.