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Kay Adeoti
May 12, 2022
by Kay Adeoti

DeFi Protocols Now The Biggest Recipient And Target Of Illicit Activities- Chainalysis

DeFi Protocols Illicit Activities
It is common knowledge that criminals and illegal activities often aim their attention toward cryptocurrencies and the protocols that underpin decentralized financial systems. Due to this, DeFi protocols seem to be increasingly under the threat of attacks via illicit activities, according to a recent analysis published by Chainalysis. Over the course of the last three years, however, this kind of activity has become a less major component of the larger cryptocurrency ecosystem, which will surely be a cause of worry for several crypto enthusiasts.

From the report, out of the $1.68 billion worth of cryptocurrencies stolen from the start of this year till May 1, 97% of it has come from DeFi protocols. This is due to the fact that their decentralized nature makes it more difficult to monitor the flow of cash.

Where Exactly Is All of That Money Going?

The majority of the losses have been caused by the theft of funds via hacking, which has been accompanied by a rise in the use of DeFi protocols for money laundering as well, with the majority of them going to hacker organizations that are affiliated with the government of North Korea. These groups have stolen over $840 million in just this year alone via breaches of DeFi protocols.

The number of thefts committed using DeFi protocols has been steadily increasing since the previous year, reaching their peak in the first three months of this year. This is mostly the result of the $622 million Ronin Bridge assault that took place at the end of March and the $320 million Wormhole attack in February. In addition, DeFi protocols have emerged as the primary beneficiary of illegally obtained funds, receiving 69% of the total amount of money transmitted from addresses known to be involved with illicit activities, an increase from the 19% share they had in 2021.

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chainalysis DeFi Illicit Activities
DeFi Protocols Now The Biggest Recipient And Target Of Illicit Activities- Chainalysis
Kay Adeoti
Kay is a content specialist who has a particular interest in the finance and cryptocurrency industries, among others. He is a frequent contributor to a number of finance and cryptocurrency-related websites, where he offers readers with informative and educational articles on the cryptocurrency and financial markets. Aside from that, he is an avid supporter of blockchain technology.

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