Key Takeaways
- FBI highlights that between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms.
- Agency observed hackers exploiting vulnerabilities in smart contracts that govern DeFi platforms to steal crypto.
The US Federal Bureau of Investigation(FBI) has warned concerning the increasing number of cyber crimes in the Decentralised Finance(DeFi) space.
FBI states that between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms.
The agency highlights that cybercriminals seek to take advantage of investors’ increased interest in cryptocurrencies, the complexity of cross-chain functionality, and the open-source nature of DeFi platforms.
The law enforcement agency also observed cybercriminals exploiting vulnerabilities in smart contracts that govern DeFi platforms to steal investors’ cryptocurrency.
“Separately, the FBI has observed cybercriminals defraud DeFi platforms by 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”, FBI states.
The FBI further observed the manipulation of crypto 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 crypto.
In its statement, the FBI also recommended investors and the DeFi platform to stay alert to cybercriminals.
In its advice to investors, the agency should ensure the DeFi investment platform has conducted one or more code audits by independent auditors.
Instituting real-time analytics, monitoring, and rigorous code testing to quickly identify vulnerabilities and respond to indicators of suspicious activity is another recommendation the FBI provides to DeFi platforms.
According to analytics firm Crystal Blockchain’s July report, in the past 11 years, there have been 167 hacks of DeFi protocols.
The report adds that while breaching centralized platforms accounted for over $3.2 billion in crypto stolen, over $4 billion was funneled out of exploited DeFi projects.
The recent reports highlight a concerning trend in which hackers’ attention has shifted notably toward decentralized protocols.
In 2022, decentralized projects have been hacked 20 times more often than centralized ones, and funds stolen from the top 10 DeFi attacks exceeded $2.5 billion.
