DeFi Platforms Exploits: Federal Bureau of Investigation Issues Warning

Crypto Steal From DeFi System

The domestic intelligence and security service organization of the United States reveals cybercriminals stole $1.3 billion crypto between January and March 2022. A staggering 97% of stolen crypto was from DeFi systems. The same also indicated a rise from 30% in 2020 to 72% in 2021. The agency reported that it had seen criminals take advantage of signature verifications, manipulate cryptocurrency price pairs, get around slippage checks, and use flash loans as a payment method. Regarding the latter, the FBI provided an example and made a note.

FBI Recommends Due Diligence, Testing

Even while the FBI acknowledged that "all investments carry some risk," the agency has advised that investors thoroughly examine DeFi platforms before using them and, if in doubt, consult a qualified financial adviser. The agency stated that it was crucial that the platform's protocols were robust and that they had undergone one or more independent code audits. A code audit often entails a review of the platform's underlying code to find any holes or flaws that might have a chance of exploitation. The FBI advises caution when dealing with any DeFi investment pools with a "minimum period to join" or "rapid deployment of smart contracts," mainly if they have not conducted a code audit.

DeFi Platforms

According to the FBI, DeFi platforms can also contribute to security by routinely testing their code to find vulnerabilities and using real-time analytics and monitoring. The guidelines also include developing an incident response strategy and warning users of potential platform flaws, hackers, exploits, or other questionable behavior. If all else fails, the FBI advises American investors who have been the target of hackers to get in touch with them via the Internet Crime Complaint Center or their local FBI field office.