The US Federal Bureau of Investigation (FBI) recently issued a warning to investors that cybercriminals are increasingly exploiting vulnerabilities in decentralized finance (DeFi) platforms to steal cryptocurrency from investors. Finding that nearly 97 percent of the $1.3 billion stolen in cryptocurrencies between January and March 2022 were from DeFi platforms, the FBI noted that this represents an increase from 72 percent in 2021. The warning also noted that the FBI has observed cyber criminals which exploits vulnerabilities in smart contracts that regulate DeFi platforms. The warning urges investors to research any DeFi platforms they use and ensure that the DeFi platforms are secure.
An Avalanche-based lending protocol recently fell victim to such a hack. A blockchain cybersecurity firm reported that a hacker stole $371,000 worth of USD Coin using a smart contract exploit. The protocol later released a detailed statement about the incident, explaining that an “exploiter” deployed a custom smart contract that used a $51 million flash loan from Avalanche to artificially manipulate the pool price of a single block. After consulting with security experts, the protocol developed a mitigation plan, alerted police and stopped the exploited market.
According to recent reports, blockchain analysts and intelligence officials have noticed that the Islamic State of Iraq and Syria (ISIS) has begun using non-fungible tokens (NFT) for recruitment and funding. The report describes an NFT “visible on at least one NFT trading website” bearing the ISIS emblem and titled “IS-NEWS #01.” According to the report, while the ISIS-themed NFT does not appear to have been traded, its existence on the blockchain makes it nearly impossible to remove or censor, unlike other online recruitment and messaging tools.
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