Former chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo, spoke in favor of strengthening the regulation of the crypto industry.
According to CipherTrace, from January to April 2021, fraudulent DeFi projects stole $83.4 million from crypto owners. This is more than twice higher than in 2020. According to CipherTrace CEO Dave Jevans, the DeFi space experienced explosive growth, many innovative products emerged, but it has also served as a breeding ground for fraud.
“Bad guys are always going to follow the money,” said J. Christopher Giancarlo, a former chairman of the Commodity Futures Trading Commission who is now on the board of crypto startup BlockFi. “As the industry matures and surveillance tools get better, hopefully the cops will catch up.”
DeFi projects offer investors returns much higher than regular interest rates, and even some bona fide DeFi projects are run by anonymous teams. This makes it easier for scammers who raise assets with the only aim to hide with investor funds.
Affected investors became more active in reporting cryptocurrency fraud. Consumers reported nearly $82 million in losses due to crypto scams in Q4 2020 and Q1 2021, according to the US Federal Trade Commission. It is more than ten-bold higher than during six months a year earlier.