The U.S. Federal Bureau of Investigation (FBI) says that one popular niche of the cryptocurrency ecosystem has become a prime target for cyber criminals.
In a new press release, the agency reports that users of decentralized finance (DeFi) suffered over a billion dollars in losses during the first quarter of this year due to malicious online actors.
“Between January and March 2022, cyber criminals stole $1.3 billion in cryptocurrencies, almost 97% of which was stolen from DeFi platforms, according to the US blockchain analysis firm Chainalysis.”
The announcement says that tech-savvy criminals are taking advantage of vulnerabilities within the structure of DeFi platforms to fleece unwitting crypto traders.
The FBI reveals several methods which the cyber criminals employed:
“Initiating a flash loan that triggered an exploit in the DeFi platform’s smart contracts, causing investors and the project’s developers to lose approximately $3 million in cryptocurrency as a result of the theft.
Exploiting a signature verification vulnerability in the DeFi platform’s token bridge and withdraw[ing] all of the platform’s investments, resulting in approximately $320 million in losses.
Manipulating cryptocurrency price pairs by exploiting a series of vulnerabilities, including the DeFi platform’s use of a single price oracle and then conducting leveraged trades that bypassed slippage checks and benefited from price calculation errors to steal approximately $35 million in cryptocurrencies.”
The agency goes on to make several recommendations about how DeFi users can avoid getting scammed, including researching whether a platform has conducted a code audit, skepticism toward investment pools which set brief funding windows and wariness toward platforms which rely on open-source code contributions.
The report also encourages DeFi platforms to enhance security measures and develop vigilant threat response plans.
At time of writing, the DeFi subsector has a total valued locked of nearly $60 billion. Over 57% of that capital ($34.22 billion) resides on Ethereum (ETH).
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/DomCritelli/Hoowy
Credit: Source link
