Theft in the crypto industry is something that regulators have not been able to find a way around, despite many measures to counter it. The latest figure of stolen Bitcoin across the crypto market in 2020 shows that theft in the Bitcoin space drastically reduced last year compared to the one before.
In the words of CASA CTO James Lopp, the reduction rate in 2020 compared to 2019 was about 92%. A detailed document that Loop released recently showed that only 4,473 Bitcoins were officially reported stolen via illegal means compared to the figure of 2019, which was about 54,570. Notably, Lopp has been keeping these records of stolen Bitcoin since 2014.
James Lopp has been keeping the records since 2014
According to James Lopp, two factors were responsible for the drastic fall in the rate of stolen Bitcoin. The first was that crypto exchanges were now using sophisticated means of security on their platforms. Lopp noted that malicious actors have now completely switched to the decentralized finance sector. They now have a field day moving funds away from the industry due to their shabby security.
In his latest tweet, Lopp mentioned the criteria that he used to classify what he describes as stolen, with the CASA CTO posting the records for all to see. In his definition, James Lopp mentioned that stolen Bitcoin, according to his definition, is when a user logs into his wallet and discovers that all his Bitcoins have been wiped clean by malicious actors.
This can be either by trick, hacks, malware, and other means. Finalizing his analysis, Lopp mentioned that this year would be regarded as one of the best years for crypto exchanges as they have had to record a very low rate of stolen Bitcoins.
2014 ranks top in the year with most hacks
Last year, 4,473 stolen Bitcoin a better record compared to the one that happened in 2020. It also bettered the record of stolen Bitcoin that took place in 2014. As it stands now, 2014 has the highest number of stolen Bitcoin, boasting a figure of 678, 262 made possible by the huge theft of about 500,000 Bitcoin that took place on Mt. Gox.
This year has seen several crypto exchanges beef up the security on their platforms, with most of them having various sophisticated methods of either recovering funds or making it hard for the malicious actors to withdraw and spend them. Also, crypto exchanges have done their best in drumming simple security measures on their respective wallets into their users’ ears. Several crypto exchanges enforced measures like KYC, 2FA on various crypto exchanges.
Another reason for the reduction in stolen Bitcoin according to tracking platform, Ciphertrace, is that various illegal actors have noticed that most DeFi sectors’ protocols can be easily hacked, moving to the industry in mass. Even though most DeFi protocols are now waking up to the realization that malicious actors are now in the sector, they could do little or nothing to stop them last year as most of them had a nice time hacking protocols and stealing funds belonging to customers.