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FBI says investors should take precautions before putting money into decentralized finance platforms

Cybercriminals are increasingly exploiting security flaws in smart contracts to steal cryptocurrency, based on the Federal Bureau of Investigation. Within an advisory it published on Monday (via Bleeping Computer), the agency warned investors of a substantial uptick in attacks targeting decentralized finance platforms.

Between January and March of the year, hackers stole $1.3 billion worth of cryptocurrencies, with almost 97 percent of this money via DeFi platforms, the FBI said citing data from Chainalysis. Thats a rise from both 2021 and 2020 when DeFi-related thefts represented 72 percent and 30 percent the foundation of most stolen crypto. The agency has seen criminals hire a variety of solutions to fleece DeFi platforms. In a single case, hackers employed a so-called flash loan attack to steal approximately $3 million worth of cryptocurrencies. In another attack targetting a signature verification vulnerability in a platforms token bridge, cybercriminals made off with $320 million.

DeFi chart

Chainanalysis

Some of the most prolific hacks lately belong to those types of attacks. For example, the biggest crypto heist ever saw the Lazarus Group, a North Korean state-sponsored hacking collective, target Axie Infinity. The group reportedly exploited a backdoor in a Remote Procedure Call node from Axie creator Sky Mavis to forge fake withdrawals using compromised private keys. Recently, a hacking free-fo-all saw Nomad bridge users lose $200 million worth of crypto because of misconfiguration.

The FBI recommends investors have a couple of precautions before risking their money with a DeFi platform. You need to research the platform you would like to invest in, along with the information on the smart contract they employ. Additionally, only put money down on a company or company which has covered independent code audits. Additionally you desire to avoid investment pools with extremely limited timeframes to become listed on.

“Cyber criminals seek to benefit from investors’ increased fascination with cryptocurrencies, along with the complexity of cross-chain functionality and open source nature of DeFi platforms,” the FBI said. “Investors should make their very own investment decisions predicated on their financial objectives and money and, if in virtually any doubt, should talk to an authorized financial adviser.”

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