Why the FBI Has an Eye on DeFi
While crypto remains largely unregulated, yet another federal agency is sounding the alarm.
The FBI has issued a new warning to crypto investors, citing increased cybercrime in decentralized finance as criminals exploit vulnerabilities in smart contracts.
“Cyber criminals are increasingly exploiting vulnerabilities in the smart contracts governing DeFi platforms to steal cryptocurrency, causing investors to lose money,” the agency noted in a release.
“Between January and March 2022, cyber criminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms, according to the US blockchain analysis firm Chainalysis.”
FULL VIDEO TRANSCRIPT BELOW:
The FBI has a new warning for crypto investors. According to the FBI, cybercriminals are becoming even more active in the decentralized finance space and are looking to exploit vulnerabilities within smart contracts.
In fact, the FBI cites an April report from Chainalysis which shows that DeFi hackers are on the rise. In the first three months of 2022, hackers made off with $1.3 billion. According to more recent data from Chainalysis, around $1.9 billion has been stolen from January to July. And, unfortunately, that figure doesn’t even include the $200 million Nomad attack or the draining of millions from thousands of Solana wallets.
So, what can investors do? Well, the FBI recommends that investors ensure that the platform has code audits performed by outside auditors as well as performing due diligence before jumping into a project…so while that’s solid advice, how can investors be protected from criminals in a space with no regulation?