FBI Warns About Decentralized Finance Exploits and the Losses Associated With Them
The United States Federal Bureau of Investigation (FBI) has issued a public service announcement about exploits attackers have recently used to steal cryptocurrency from investors that put money on decentralized finance (defi) platforms. The organization also advised crypto investors to do their own research and verify that the decentralized finance platforms chosen were audited by independent parties. Defi Platforms Under the Eye of the FBI
The FBI has begun to notice the attention scammers are giving to decentralized finance (defi) platforms in order to exploit their operations. The bureau has issued a public service announcement warning investors and defi platforms about this development, and issuing recommendations to try and prevent these exploits from happening.
The FBI has observed three recent hacks, by which attackers have managed to compromise these decentralized finance protocols: initiating flash loans, exploiting signature verifications to empty cross-platform bridges, and manipulating crypto price pairs by exploiting oracles used to update the price of a cryptocurrency asset in real-time. These exploits reportedly caused defi platforms and their investors to lose $358 million. Advice Issued to Defi Platforms and Investors
While the service announcement does clarify that investments carry risk and that investors in these platforms should seek advice from financial advisors, the FBI also issues a set of recommendations for avoiding questionable defi sites.
These recommendations include researching the platforms before putting funds behind them, investing only in platforms with audits from independent parties to minimize risk of exploits, and being aware of the changes that crowdsourced code underlying these platforms can suffer due to the many actors with access to such repositories.
However, not all recommendations were directed to investors, as decentralized protocols also share the responsibility of minimizing the occurrence and gravity of these events. The organization advises decentralized finance protocols to implement real-time analytics tools that serve to identify the possibility of a threat by examining and detecting suspicious actions, and also to design strategies to deal with such incidents, alerting investors in the process.
In July, the FBI warned about liquidity mining scams and the dangers of fake cryptocurrency apps designed to steal crypto from investors. Tags in this story Attacks, decentralized finance, DeFi, Exploits, FBI, Federal Bureau of Investigation (FBI), Hack, Oracles
What do you think about the latest decentralized finance warning issued by the FBI? Tell us in the comments section below. Sergio Goschenko
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved. Bitcoin’s Mining Difficulty Change Prints 2022’s Second Largest Increase — Metric Nears All-Time High NEWS | 6 hours ago Fugitive Founder of Turkish Crypto Exchange Thodex Arrested in Albania NEWS | 1 day ago
Image Credits: Shutterstock, Pixabay, Wiki Commons, Mark Van Scyoc / Shutterstock.com Previous articleBitcoin Beach to Receive More Than $203 Million in Infrastructure Investments in El Salvador Next articleNew Study Says Number of Cryptocurrencies Now at 10,000 — Five Coins Account for 75% of Total Market Cap Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.Tony Hawk"s Latest NFTs to Come With Signed Physical Skateboards UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Iran to Increase Penalties for Unauthorized Cryptocurrency Mining