The cryptocurrency market as a whole has not experienced the best PR in the last 12 months. After crypto exchange FTX filed for bankruptcy in November, there have been enhanced calls for increased regulation in the space. Such news has also not been the only source of bad news for the crypto industry. As the number of investors in the space has risen, so has the amount of fraud experienced.
A study of crypto fraud, detailed by CoinJournal, shows the extent to which it has grown year-on-year. The research looks at the impact of cryptocurrency fraud since the beginning of 2011.
2022 emerged as the worst year currently on record for crypto fraud. There were 120 different incidents occurring during the year. The number represents a 28 per cent rise compared to 2021. Despite this worrying statistic, the total value lost across all incidents in 2022 was less than half of that of 2021.
Ninety-four separate crypto frauds took place in 2021 according to CoinJournal. The total funds lost was the highest in the last 10 years, reaching $4.6billion.
The first year recorded, 2011, saw only eight incidents. The number of incidents remained below 20 every year until 2019, which saw 26 incidents. The stats show a sharp increase in the past four years, highlighting a need for increased regulation and security in the space.
What are the most common kinds of attacks?
Decentralised finance (DeFi) breaches became the most common type of crypto attack since 2011, following 80 incidents taking place in 2022 alone. These attacks accounted for 66 per cent of all 2022 incidents.
The number of DeFi breaches total 167 since 2011; meaning that 47.9 per cent of all DeFi breaches occurred in 2022.
The second most common type of crypto attack was fraud, seeing 36 fraudulent occurring in 2022. This type of attack rose by over 140 per cent from 2021. The biggest fraud of 2022 was worth £53,940,000 alone. Despite happening less frequently, more money has been lost through fraud than any other type of crypto attack.
In total across all years on record, more money has been lost or stolen through fraud than through breaches and DeFi breaches combined.
What cryptocurrencies are most at risk?
Binance Smart Chain (BSC) was the most stolen coin in 2022, with the currency being stolen a total of 50 times. BSC saw a 72 per cent increase from 2021 when it was stolen just 29 times.
The second most commonly stolen coin in 2022 was Ethereum (ETH), having been lost 33 times. The cryptocurrency has been stolen 85 times in total.
Since 2011, the coin most stolen is Bitcoin (BTC), with the cryptocurrency being stolen in 94 crypto scams. While it retained top spot, BTC was only stolen in three separate scams throughout 2022.
Where are crypto scams targeting the most?
CoinJournal also looked at which countries have experienced the most crypto fraud since 2011. The United States remained the most commonly targeted country, with 13 hacks and breaches since records began. The country’s most recent took place in July 2020; when hackers gained access to verified Twitter accounts and launched a large fake donation campaign.
The UK has seen 11 hacks and breaches in which crypto was stolen. The most expensive of these was in November 2017 when $155million worth of ETH was locked after a user accidentally used a contract vulnerability.
Kristina Taylor is a highly knowledgeable journalist who has been following the financial news and cybercrimes space since 2011. She holds a degree in communication and media studies from Aarhus University and has always had a passion for writing.
Throughout her career, Kristina has become a well-traveled journalist within the industry and has contributed to many well-known publications. She has a keen eye for detail and is often found poring over white papers to gain deeper insights into the latest trends and developments.
Kristina’s extensive knowledge and experience in the field of finance and technology make her an invaluable contributor to Financial Magazine. She is highly respected in the industry and is known for her ability to break down complex concepts into easy-to-understand pieces for her readers.