- Chainanalysis has recently reported a 0.34% reduction in the crime rate in cryptocurrencies.
- It was above 2.1% in the last two years.
- Crypto hack methods are still prevalent.
Chainanalysis, a crypto crime analysis firm, has recently reported that cryptocurrencies‘ crime rate has significantly reduced to 0.34% of the total crypto cap value. Previous two years, the crypto crime percentage was above 2.1%. Even though the crime rate has reduced, there are still crypto hack methods that hackers employ, causing most of the damage.
MOST PREVALENT HACK OF 2020
The most prevalent method was ransomware. Due to the situation of a pandemic, many of the people were forced to work from home. So hackers made this a chance to work out their plans. This is done in the darknet, where the sender and receiver’s identity is challenging to identify. This method has seen a rise of 311% from the previous years and occupies a 7% share in the money looted by crypto crimes. This 7% was equivalent to almost $350 million. The darknet has seen a rise of $0.4 million, as observed from last year.
WHAT IS RANSOMWARE?
Ransomware can be explained as the injection of a virus into the host’s computer such that it affects the computer’s functioning and does not allow the host to access it. The hackers fix a ransom to be paid to them and remove the virus from the victim’s computer once the money is received. Generally, the ransom is paid in the form of cryptocurrencies.
REASONS FOR CRIME RATE PLUMMETING
The crime rate has gone down as the year 2020 was not so economical as the 2019-2020 term. The economy at that time was three times that of the one in 2020. This also might be the main reason for the decreased crime rate in cryptocurrency. Less economic situations have resulted in less crime rate.
The second one in priority would be the increased awareness of people after the scams in the crypto market. The best example of such scams is the Plustoken Ponzi scheme, which resulted in a loss of $2 million amongst all victims. This scheme took place in 2018 and is considered one of the largest in crypto history.
Despite the decrease in the crime rate of cryptocurrencies, the recent comments on Bitcoin and other cryptos by Treasury Head nominee Janet Yellen have decreased the value of the crypto market leader Bitcoin. Bitcoin, which was sailing over $40,000, dropped down below $30,000 now.
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