FBI warns of dangers of decentralized finance (DeFi) following rise in hacks

Faced with the growth of hacks relating to the decentralized finance (DeFi) sector, the FBI has published a list of recommendations for investors and platforms in order to limit the risks associated with this type of investment. The Federal Bureau particularly points out the risks associated with flash loans, the operation of bridges, or even price manipulation.

The FBI warns of the dangers of DeFi

The Federal Bureau of Investigation (FBI) issued a press release dated August 29 to raise awareness among American citizens about the dangers of hacks from decentralized finance (DeFi).

Supporting data, the FBI recalls that in the first quarter of 2022, 97% of the funds stolen in the cryptocurrency sector are directly related to decentralized finance :

“Between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrency, nearly 97% of it from DeFi platforms, according to US blockchain analytics firm Chainalysis. This is an increase of 72% over 2021 and 30% over 2020.”

In its statement, the FBI notes that cybercrime is increasingly oriented towards exploiting loopholes in smart contracts by taking advantage of “the open source nature of DeFi platforms”, effectively causing investors to lose money.

The Office points to 3 types of particularly popular attacks, starting with flash loans, a process sometimes used to exploit certain flaws, as was the case during the Crema Finance hack at $8.8 million a month last.

Next comes cross-chain bridge mining, such as in the Nomad hack earlier this month for the hefty sum of $190 million. Note that according to a recent report by Chainalysis, bridges are the main cause of hacks in decentralized finance.

Finally, the FBI mentions price manipulation through certain vulnerabilities via oracles or leverage.

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