Crypto is Safer than Fiat: Changpeng Zhao
In 2021, cryptocurrency-related crime reached a new peak. In 2019, illegal addresses got $14 billion, climbing from $7.8 billion in 2020. From 2020 to 2021, the overall amount of transactions surged by 567% to $15.8T. Despite all of that, crypto is safer than fiat.
Changpeng Zhao Claims Crypto is Safer Than Fiat
Earlier today, Changpeng Zhao, the founder of Binance, took to his Twitter account to inform his followers why he believes that cryptocurrency is way safer than Fiat.
He quoted some crypto crime analysis by Chainalysis and United Nations in his tweet. According to Chainalysis, illegal addresses accounted for only 0.15 percent of total cryptocurrency trading volume in 2021 According to the United Nations. In a single year, money laundering is estimated to be 2-5 percent of worldwide GDP or $800 billion to $2 trillion in US dollars.
DeFi Crimes
What has changed in the previous 12 months? Let's start with the forms of cryptocurrency-related crime that grew the highest in trading volume last year. To a lesser extent, stolen money and fraud are two categories that have seen a significant rise. For both, DeFi is a huge part of the tale.
In 2021, scamming earnings increased by 82 percent to $7.8 billion in cryptocurrencies stolen from victims. Rug pulls are a new scam in which developers construct what look to be reputable enterprises and then vanish. One centralized exchange is responsible for 90% of the overall value lost through rug pulls.
DeFi projects were engaged in every other rug-pull recorded by Chainalysis in 2021. Developers have duped investors into buying tokens related to a DeFi project before stealing their funds. Several investors could have tried preventing losing funds to rug pulls if they'd only made investments in projects that had been code audited instead of projects that had not.
The rise in DeFi-related thefts continues a pattern we saw in our Cryptocurrency Crime report from 2021. In 2020, little under $162 million in cryptocurrencies was stolen on DeFi systems, accounting for 31% of the overall amount taken for the year. That was a 335 percent rise above the total amount of money taken on DeFi services in 2019.