Over $1,260,000,000 Stolen From Ethereum-Dominated Crypto Sector In Q1 This Year: FBI
The US Federal Bureau of Investigation (FBI) says a popular niche in the cryptocurrency ecosystem has become a prime target for cybercriminals.
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, cybercriminals stole $1.3 billion in cryptocurrencies, nearly 97% of which were stolen from DeFi platforms, according to US blockchain analytics firm Chainalysis.”
The announcement says that tech-savvy criminals are exploiting vulnerabilities in the structure of DeFi platforms to fleece unwitting crypto traders.
The FBI reveals several methods that cybercriminals used:
“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.
Exploits a signature verification vulnerability in the DeFi platform’s token bridge and withdraws[ing] all of the platform’s investments, resulting in approximately $320 million in losses.
Manipulating cryptocurrency price pairs by exploiting a number of vulnerabilities, including the DeFi platform’s use of a single price oracle and then executing leveraged trades that bypassed slippage checks and took advantage of pricing errors to steal approximately $35 million in cryptocurrency.”
The agency goes on to make several recommendations on how DeFi users can avoid being scammed, including investigating whether a platform has conducted a code audit, skepticism about investment pools that set short funding windows, and caution against platforms that rely on open source contributions.
The report also urges DeFi platforms to improve security measures and develop vigilant threat response plans.
At the time of writing, the DeFi sub-sector has a total value of nearly $60 billion. Over 57% of this capital ($34.22 billion) resides on Ethereum (ETH).
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Featured Image: Shutterstock/DomCritelli/Hoowy
