Scam and fraud in the cryptocurrency arena does not stop and is shaped and changed according to new innovative projects in the crypto arena in general and in the new decentralized finance arena in particular.

The company “CipherTrace” published yesterday a report It shows that 40% of all hacks that occurred in the cryptocurrency arena in the first half of 2020 targeted decentralized finance (DeFi) protocols and cryptocurrency exchanges.

CipherTrace found that $51.5 million in DeFi-related projects were stolen from January through June.

As of July, this theft amounted to 47.7 million dollars.

DeFi projects refer to decentralized financial products, such as decentralized lending protocols, decentralized trading platforms, and other decentralized protocols.

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These projects became particularly popular this summer after they began offering lucrative rewards to investors, who have pumped over $14 billion in cryptocurrencies with these protocols in the past months to date.

Many of these products are new, highly experimental and unregulated, which makes them vulnerable to piracy.

In its report, CipherTrace told:

Decentralized finance protocols and projects are usually decentralized, meaning that they lack any clear regulatory compliance and can be accessed by anyone in any country with little information collected about them and sometimes users access them without any knowledge at all.

Another downside about decentralized finance projects is that they have become vulnerable to money laundering by many criminals.

Earlier this year, the bZx margin lending protocol was hacked three times.

Twice, two million were stolen from the project in February, and the third theft occurred in September, costing the project $8.1 million.

Also, $25 million was stolen from the dForce project in April of this year, but the hackers returned the money after it was blacklisted.

Another project that has been drained is the “Harvest Finance” project where $34 million was stolen from it.

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The decentralized finance project “Harvest Finance” allocates a financial reward for finding hackers

CipherTrace told CipherTrace that the percentage of funds lost due to DeFi hacks and thefts rose in the second half of the year due to the attack on crypto exchange KuCoin, which stole nearly $281 million in cryptocurrency from the exchange.

According to CipherTrace, if the DeFi industry does not find a way to maintain the shape of its smart contracts, it is likely that decentralized finance projects will continue to suffer the consequences of vulnerabilities, fraud, and money laundering.

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