Crypto fraud decreases as adoption and usage grow

Fraudulent crypto transactions declined in 2021, while market adoption continued to grow

Cryptocurrency fraud                                 
Illicit activities such as crypto fraud and phishing scams declined in 2021 when compared to 2020 – Photo: Getty Images
                                

A recent report from CipherTrace has highlighted that despite the crypto sector expanding rapidly in 2021, with a significant increase in the number of crypto users worldwide, illicit activities such as crypto fraud and phishing scams actually declined during the same year when compared to 2020.

The report highlights that, while 2021 saw the crypto sector boom and mature, overall illicit activity as a percentage of total market activity was down to 0.10%-0.15%. 

CipherTrace noted that a significant portion of fraudulent activity has now shifted into DeFi, NFTs and next-generation mixing services as global adoption continues to increase, with the regulations around these sectors evolving constantly in an effort to keep pace. 

Legal and regulatory agencies have also been active, with a reported $3.5bn worth of cryptocurrencies seized in 2021.

Market adoption

While 2021 was recorded as an impressive year for the crypto market, 2022 has witnessed a rocky start, with the crypto sector falling into a bear market and pushing towards a significant sell-off phase. Bitcoin, for instance, has lost around 60% of its value since its peak in November 2021.

Despite this, market adoption seems to remain intact: the estimated global crypto ownership rate is now around 3.9%, with over 300 million crypto users worldwide, and around 18,000 businesses now accepting cryptocurrency payments. 

The global adoption of NFTs is also significant, with approximately 360,000 NFT owners holding around $2.7m worth of NFTs between them.

Further reading

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