Chainalysis data reported by the FBI indicates that $1.3 billion worth of crypto was stolen between January and March. All this money was stolen from 97% DeFi platforms.
97% of thefts take place in DeFi
The FBI recently issued a warning to investors about the increasing number of cryptocurrency thefts. According to Engadget, this is due to an increase in incidents on decentralized financial platforms.
Criminals are exploiting vulnerabilities in smart contracts to steal cryptocurrency. The Federal Bureau of Investigation reports that thieves are increasingly taking advantage of flaws in decentralized systems. By doing so, they cause huge losses for crypto investors.
The FBI explains what a smart contract is by referring to a document. Smart contracts are written in code and stored in blockchains; they are contracts that exist without anyone doing anything. Both parties involved in the contract agree directly to the terms in the code.
Criminals are taking advantage of the growing popularity of the crypto field and the open source nature of decentralized financial platforms. That’s what the article about cyber criminals says.
According to Chainalysis data collected by the FBI, $1.3 billion worth of cryptocurrencies was stolen between January and 2022. However, 97% of this stolen amount came from DeFi or decentralized financial platforms.
“Between January and March 2022, cybercriminals stole $1.3 billion worth of cryptocurrencies, nearly 97% of which was from DeFi platforms, according to US blockchain analytics firm Chainalysis. This is an increase of 72% from 2021 and 30% from 2020.”
Thieves have stolen millions of dollars in crypto through targeted flaws in smart contracts. The FBI found that this percentage was 30% in 2020 and the same percentage was 72% in 2021.
The FBI Makes Some Recommendations
The FBI advises investors to consult financial advisors when in doubt. They also recommend considering DeFi protocols verified by independent companies. In addition, the FBI has written several paragraphs of recommendations to investors to mitigate the risks associated with their use of these protocols.
Before investing in high-risk protocols, smart contracts, or platforms, it is important to do deep and thorough research into the potential flaws in each protocol. This way you are aware of the risks associated with this type of investment.
“Make sure that DeFi’s investment platform has completed one or more code audits by independent auditors. A code audit typically involves an in-depth review and analysis of the platform’s underlying code to identify any vulnerabilities or weaknesses in the code that could negatively impact the platform’s performance. »
It is suggested that the platforms implement real-time monitoring for potential errors or run rigorous tests on the code. Alternatively, they can develop a plan to mitigate the expected damage from vulnerabilities.
It’s advice in crypto, but it’s important to remember to “do your own research” when considering getting involved in decentralized finance. With this in mind, we encourage everyone to do their own research before investing money in any particular project.
“Research DeFi platforms, protocols and smart contracts before investing and be aware of the specific risks associated with DeFi investments.”