FBI Warns Of Decentralized Finance Exploitation And The Losses Associated With Them – Bitcoin News

The United States Federal Bureau of Investigation (FBI) has issued a public service announcement about exploits attackers have recently used to steal cryptocurrency from investors depositing money on decentralized finance platforms (defi). The organization also advised crypto investors to do their own research and verify that the decentralized financial platforms chosen were audited by independent parties.

Defi platforms under the eye of the FBI

The FBI has begun to notice the attention fraudsters are giving decentralized finance platforms (defi) to exploit their business. The agency has issued a public service announcement alerting investors and defi platforms to these developments, and providing recommendations to try to prevent these exploits from occurring.

The FBI has observed three recent hacks in which attackers have managed to compromise these decentralized financial protocols: initiate flash loans, exploit signature verifications to clear cross-platform bridges, and manipulate crypto price pairs by exploiting oracles used to update the price of a cryptocurrency asset in real time. These exploits reportedly caused defi platforms and their investors to lose $358 million.

Advice issued to Defi platforms and investors

While the service announcement makes clear that investments carry risks and that investors in these platforms should seek the advice of financial advisors, the FBI also provides a set of recommendations to avoid dubious defi sites.

These recommendations include researching the platforms before putting funds behind them, investing only in platforms with audits by independent parties to minimize the risk of exploitation, and being aware of the changes that crowdsourced code underlying these platforms may suffer due to the many actors with access to such depots.

However, not all of the recommendations were aimed at investors, as decentralized protocols also share the responsibility of minimizing the occurrence and severity of these events. The organization advises decentralized finance protocols to implement real-time analytics tools that serve to identify the possibility of a threat by investigating and detecting suspicious actions, and also to devise strategies to deal with such events, alerting investors in the process.

In July, the FBI warned about liquidity mining scams and the dangers of fake cryptocurrency apps designed to steal crypto from investors.

What do you think of the latest decentralized finance warning issued by the FBI? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. Describing himself as late to the game, he entered the cryptosphere when the price spike occurred during December 2017. He has a computer engineering background, lives in Venezuela and is influenced by the cryptocurrency boom on a social level, offering a different point of view on crypto success and how it helps the unbanked and underserved.

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