The FBI is alerting of an increase in cryptocurrency theft attacks on decentralised finance (DeFi) platforms.
According to the agency, criminals are exploiting the increased interest in cryptocurrency, as well as the complex functionality and open-source nature of DeFi platforms, to carry out nefarious activities.
According to the FBI, cybercriminals are stealing virtual currency and causing investors to lose money by utilising security flaws in the smart contracts that govern DeFi platforms. Smart contracts, defined as self-executing contracts containing the terms of an agreement between a buyer and a seller within their lines of code, are present throughout the decentralised blockchain network.
DeFi platforms accounted for roughly 97% of the $1.3 billion in cryptocurrencies stolen by cybercriminals between January and March 2022, an increase from 72% in 2021 and 30% in 2020.
According to the FBI, cybercriminals have also initiated flash loans to trigger an exploit in the DeFi platform's smart contracts (resulting in $3 million in cryptocurrency losses), exploited a signature verification bug in a DeFi platform's token bridge (resulting in $3 million in cryptocurrency losses), and tampered cryptocurrency price pairs (to steal $35 million in cryptocurrency).
Before investing, investors should research DeFi platforms, protocols, and smart contracts to identify potential risks and ensure that the DeFi investment platform's code has been audited at least once.
Furthermore, they should be cautious of DeFi investment pools with short timeframes for joining and rapid deployment of smart contracts, as well as the dangers posed by crowdsourced solutions in terms of bug hunting and patching.
According to the FBI, DeFi platforms should implement real-time analytics, monitoring, and code testing to address vulnerabilities and possibly shady activity, as well as an incident response plan that includes informing investors of any suspicious activity, including smart contract exploitation.
