Blockchain analyst firm Chainalysis published a new report focused on the illicit activities occurring on blockchains, noting that DeFi protocols are the most popular target hackers tend to go after and that money laundering in the space has risen in the past two years.

Since the DeFi Boom occurred in the summer of 2020, illicit DeFi transactions have risen steadily. Money laundering and DeFi hacking have been the two major criminal activities on such protocols, Chainalysis’ report shows. In total, $1.7 billion worth of digital assets were stolen by perpetrators in 2022, with 97% coming from DeFi protocols. The report outlined that, as of 2022, most stolen funds – over $840M – have gone to hackers with ties to North Korea.

Besides hacking, money laundering conducted via DeFi has also grown consistently over the past years, with DeFi protocols taking in 69% of the crypto-based funds associated with criminal activities. Also, the lack of KYC requirements for most DeFi projects has made them more enticing to criminals.

By Amy Liu