The Federal Bureau of Investigation (FBI) has asked decentralized finance (DeFi) platforms to beef up security measures and warned investors against the vulnerabilities in those platforms.
Between January and March 2022, cyber criminals stole $1.3 billion in cryptocurrencies, almost 97% of which was stolen from DeFi platforms, the FBI said citing a report from blockchain analysis firm Chainalysis.
Criminal generally exploit DeFi platforms by initiating a flash loan vulnerability, exploiting signature verification or by manipulating trading pairs, the FBI said. To this effect the agency asked investors to do their due diligence while using DeFi platforms and use platforms that have conducted audits or been around for sometime.
DeFi platforms should start instituting real-time analysis, monitoring and testing, the bureau said. The platforms should also have a plan for tackling exploits and alerting investors, the bureau added.
Earlier this year, the FBI had joined with LinkedIn (LNKD) to fight fraudsters using the professional networking platform to lure investors into cryptocurrency schemes.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.