With the explosive growth of the DeFi sector of the cryptocurrency industry, there is also a growing number of DeFi-related hacks and frauds in recent months.
According to a report by the Blockchain analysis startup, CipherTrace, DeFi-related hacks, and frauds made up for more than half, about 54%, of the total value lost in crypto crimes.
Within the first four months of 2021, the crypto industry has lost about $432 million to hackers and fraudulent schemes, with DeFi-related crimes taking up $240 million of the total amount.
Out of the major hacks and thefts that have occurred in 2021, 60% were attacks made on DeFi projects. DeFi-related rug pulls also constituted 47.4% of the total fraud and misappropriation cases so far.
The $156 million stolen by hackers in the first four months of 2021 alone has far exceeded the $129 million lost to DeFi-related hacks in 2020, which had been considered an all-time high (ATH) then.
With fraudulent DeFi schemes such as rug pulls taking up about $83.4 million, it represents an increase of over 200% of 2020’s total DeFi-related fraud volume.
The DeFi space has been experiencing an explosive level of growth in recent months, with the total value of assets locked in DeFi reaching extraordinary heights.
The value had reached nearly a quarter of Ethereum’s total market cap by the end of 2020. This total value had grown by 36% by the end of April.
However, this high level of growth is being undermined by the number of hack and fraud cases that the DeFi space is recently experiencing.
Just a few weeks ago, the DeFi project, Uranium Finance suffered a $50 million hack amid its migration due to a major security breach.
The event happened shortly after the DeFi protocol EasyFi lost $55 million from another attack from hackers.
