FBI: Crooks Are Using These DeFi Flaws To Steal Your Money

Image: Getty Images/Oscar Wong

After a run of thefts from Decentralized Finance (DeFI) platforms, the Federal Bureau of Investigations (FBI) has warned that criminals are increasingly exploiting bugs in these platforms to steal investors’ cryptocurrency. 

The FBI has issued a warning to investors who pour money into DeFI platforms that they could be exposing themselves to financial losses due to vulnerabilities in the smart contracts governing the platforms. 

DeFi is an emerging digital financial infrastructure that theoretically eliminates the need for a central bank or government agency to approve financial transactions, and is deeply connected with the evolution of blockchain technologies.

But now the FBI warns that investors are getting burned by attackers exploiting vulnerabilities in smart contracts. 

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“A smart contract is a self-executing contract with the terms of the agreement between the buyer and seller written directly into lines of code that exist across a distributed, decentralized blockchain network. Cyber criminals seek to take advantage of investors’ increased interest in cryptocurrencies, as well as the complexity of cross-chain functionality and open source nature of DeFi platforms,” the FBI states.  

SEE: DeFi: Injective Protocol’s ‘CosmWasm’ upgrade adds more functionality for developers and users

Researchers from UK penetration testing firm Bishop Fox found that 51% of attacks on DeFI projects in 2021 exploited vulnerabilities in smart contracts, followed by platform protocol and design flaws at 18%. Most of the

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