Hackers, scammers stole over $12 billion in crypto assets in the past decade

2021 has turned out to be a great year for cryptocurrencies. During the past 12 months, bitcoin and other alt cryptocurrencies enjoyed a surge in mainstream adoption and support from institutional investors. Bitcoin went from $29,000 on January 1 to $48,000+ as of the time of writing. During the same period, we also witnessed the rise of decentralized finance (DeFi), decentralized autonomous organization (DAO), and nonfungible tokens (NFTs).

However, what’s not getting a lot of attention in the news is the amount of money lost to theft, hackers, and scammers. According to the data released by the Atlas VPN team, more than $12 billion of crypto assets were stolen in the past 11 years.

In addition, 40% of the funds were stolen from fraudulent exchanges as many crypto service providers have failed to build efficient security systems that would stop cybercriminals from exploiting flaws for personal gain at the expense of their victims. During the period, DeFi-related hacks also continue to surge.

The first part of the report covers how much crypto was stolen through security breaches, scams, and DeFi hacks in the past decade. The second part of the report goes over the methods hackers use to steal cryptocurrency assets.

Major Highlights:

• More than $12 billion of crypto assets were stolen in the past 11 years.
• Hackers stole $3.2 billion in total crypto assets through security breaches since 2011.
• Crypto fraud exploded in 2019 when total losses accumulated to $3.8 billion, a 598% increase since 2018.
• DeFi breaches quickly grew in 2021, adding up to $1.7 billion in total losses, a 1083% increase since the last year.
• Fraudulent exchanges have stolen 40% of all lost crypto assets throughout 11 years.

The first official security breach of a cryptocurrency exchange happened in 2011, while hackers stole $1 million in total throughout the year. Since then, the sum has continued to grow, reaching nearly $3.2 billion in 2021.

Crypto fraud exploded in 2019 when total losses accumulated to $3.8 billion, a 598% increase since 2018. As of now, fraudsters have stolen over $7.1 billion worth of crypto assets in the last 11 years.

DeFi hacks are the latest trend for cryptocurrency cybercriminals. It started in 2020, and hackers stole $149 million of crypto assets from DeFi exchanges. However, losses in DeFi breaches quickly grew in 2021, adding up to $1.7 billion in total.

In a statement, Atlas VPN Cybersecurity writer Vilius Kardelis shares his thoughts on crypto-related hacks and scams:

“With the popularity of cryptocurrencies growing, it’s reasonable to say that crypto-related hacks and scams are not disappearing anytime soon. Many people are ignorant of the risks of investing in cryptocurrency because blockchain technology is still relatively new. Before putting money into a platform, make sure to research its technical and security capabilities.”

Fraudulent exchanges caused most losses

While there are plenty of trustworthy cryptocurrency exchanges, there are just as many fraudulent ones, which try to prey on people’s lack of knowledge of how to distinguish a legit crypto platform.

Fraudulent exchanges have stolen 40% of all lost crypto assets throughout 11 years. Fraudulent platforms are those involved in exit scams, illegal behavior, or whose funds were seized by the government.

Exchanges with very high money laundering risks were responsible for 24% of stolen crypto assets. Such exchanges allow the withdrawal of more than $2000 in crypto daily without KYC/AML (Know Your Customer/Anti-Money Laundering).

P2P exchanges with high money laundering risks have stolen 5% of total funds. Mixing services were responsible for 4% of stolen crypto assets.