DeFi services are becoming increasingly popular with cybercriminals

Chainalysis analysts claim that illegal activity in DeFi protocols has multiplied since last year.

Chainalysis has released a new report on criminal activity in Web3. According to the study, the overall level of illegal activity in the crypto industry has declined, but it is in decentralized finance (DeFi) protocols that has increased dramatically. Analysts claim that 97% of cryptocurrencies stolen in 2022, worth a total of $1.7 billion, come from DeFi protocols.

Experts got these numbers from two major events at the beginning of the year: the attack on the Ronin Network sidechain and the hacking of the Wormhole bridge in the Solana network. In the first case, attackers managed to withdraw 173,000 ETH and 25.5 million USDC ($625 million), in the second, 120,000 wETH ($320 million). Both attacks, according to experts, are a continuation of a trend that emerged during 2021, when hackers were paying more and more attention to DeFi. The rise in thefts was also accompanied by an increase in money laundering cases.

According to Chainalysis, in 2022, DeFi protocols accounted for 69% of funds sent from wallet addresses associated with criminal activity. In 2021, their share was only 19%. According to analysts, one of the main reasons is the ability of decentralized finance protocols to exchange one type of cryptocurrency for another, which makes it very difficult to track the movement of funds. At the same time, many DeFi services provide this opportunity without identifying customers.

Last month, Macau police arrested two locals and six Hong Kong citizens on charges of fraud, as well as laundering about $53 million through digital currencies.