Laundering some crypto. Photo: Shutterstock
Cryptocurrency fraud may be declining thanks to tighter controls and better investigative tools, but as cyber criminals exploit new technologies like decentralised finance (DeFi) and non-fungible tokens (NFTs), experts are warning investors to stay vigilant.
Despite the theft of around $18.65b ($US14b) in cryptocurrency during 2021, that amount “is actually a very small number if we look at overall total economic activity” around cryptocurrencies, Ethan McMahon, an economist with blockchain-investigations firm Chainalysis, noted in a recent webinar.
That amount “only represents about 0.15 per cent of all economic activity”, McMahon said, noting that “the number in percentage terms is decreasing.”
That rate is still far higher than the 0.01 per cent fraud rates seen on Australian credit cards last year, with dollar losses from crypto fraud just half the $42.6b ($US32b) recorded worldwide – but even this, McMahon said, is a “miniscule number” compared to the 3.37 per cent fraud rate just three years ago.
Proprietary cross-matching techniques are replacing tedious manual tracing, enabling Chainalysis to follow cryptocurrency between crypto exchanges, cybercriminals, ordinary users, and investment services that all record their transactions on the public blockchain.
After years of high-profile cryptocurrency thefts, rug pulls and disastrous accidents, exchange losses now represent a “smaller…
