The Federal Bureau of Investigation (FBI) issued a new alert Monday focused on attacks on decentralized finance (DeFi) platforms. Citing examples of hacked altcoin projects, he said that cybercriminals are exploiting vulnerabilities in smart contracts. Here are the details…
FBI issues warning of altcoin attacks
The agency cited the April 2022 report by Blockchain analytics firm Chainalysis. “Between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which were from DeFi platforms,” he said. The FBI points to three tactics cybercriminals use to launch an attack:
- A flash loan attack, as in the November 2021 attack on Ethereum DeFi Project bZx, where thieves earned $55 million in cryptocurrencies.
- A vulnerability in the DeFi platform’s token bridge, as seen in the Nomad token bridge example earlier this month.
- Exploiting a number of vulnerabilities, including the use of a single price oracle, as in the April 2022 Deus Finance exploit, in which the thieves received $13.4 million. Then manipulate the price.
“Cybercriminals are trying to exploit the growing interest of investors in cryptocurrencies, as well as the complexity of cross-chain functionality and the open-source nature of DeFi platforms,” the institution says. Blockchain security firms have long followed the tactics most commonly used by cybercriminals to compromise smart contracts. The Ethereum Foundation states that “smart contract code often cannot be changed to fix security flaws. Assets stolen from smart contracts cannot be recovered and stolen assets are extremely difficult to track. Therefore, exploits at this level are dangerous,” he says.
NFT platforms are also the target of attacks
cryptocoin.com As we have reported, DeFi platforms are not the only target of cybercriminals. Last week, blockchain analytics firm Elliptic released its “NFTs and Financial Crimes” report. The report states that attacks against NFTs were worth over $100 million between July 2021 and July 2022. The FBI recommends careful review of DeFi platforms, protocols, and smart contracts before investing. It also recommends being aware of the specific risks involved.
For example, the agency recommends that consumers check whether the platform has one or more code audits performed by independent auditors. Also, the FBI advises you to be wary of investment pools, which offer extremely limited timeframes to participate and quickly deploy smart contracts, especially without the recommended code audit. As a result, the FBI advises investors to invest with caution. If you’ve been in the crypto space for a long time, you’ve probably heard the phrase “DYOR”, or “Do Your Own Research”. DYOR points out that each user should invest in their own research.
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