DeFi platforms attract hackers, FBI warns of dangers
Defi and Exchanges

DeFi platforms attract hackers, FBI warns of dangers

The world of decentralized finance (DeFi) has represented magnificent investment opportunities in recent years. A volatile environment where fortunes have been made and… big losses have occurred. More and more investors are entering this environment and hackers have understood this.

Cybercriminals are taking advantage of the complexity of DeFi

According to a study published by the FBI, there has been an increase in hacks and thefts of virtual wallets. Cybercriminals are increasingly exploiting security holes in decentralized finance platforms (DeFi) to steal cryptocurrencies.

In its document, the FBI reminds us what a smart contract is: a contract that executes itself, since the terms between the buyer and seller are written directly into the code, which is written into the blackchain.

And according to this one, cybercriminals are taking advantage of the growing interest in crypto, as well as “the complexity of cross-chain functionality and the open source nature of DeFi platforms.

Between January and pars 2022, the equivalent of $1.3 billion in cryptocurrencies were stolen. And 97 percent of that was stolen from decentralized finance or DeFi platforms, according to Chainalysis data relayed by the FBI.

By 2021, that rate was 72 percent. And in 2020, it was 30 percent. For its part, the FBI has also observed crypto thefts in which hackers stole several million dollars by targeting flaws on smart contracts. In one of these thefts, losses were estimated at $320 million.

One of the most notable break-ins was that of Axie Infinity, a game based on a system of collecting NFT (Non Fungible Tokens), on which hackers managed to steal the modest sum of $625 million in cryptocurrencies. A case that made some noise and shows the flaws in the system, even for one of the “big” play-to-earn.

FBI, be aware of the risks involved in investing

The methods used by hackers are varied: phishing, use of signature verification flaws in wallets, manipulation of cryptocurrency pairs.

The FBI has also written several paragraphs of recommendations for investors to limit the risks associated with their use of various DeFi protocols. Among other things, the Bureau recommends using professional financial advisors when in doubt and favoring platforms that have been audited by independent firms.

The emphasis is also placed on seeking prior information about the seriousness of the various protocols, smart contracts and platforms while being aware of the risks associated with this type of investment.

Finally, be aware of the risks involved in investing in this new environment. DeFi is far from being a game, to sum it up, let’s close this article with the FBI’s advice: “Investors should make their own investment decisions based on their financial goals and resources and, if in doubt, seek advice from a licensed financial advisor.”

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