FBI warns about vulnerabilities of DeFi platforms

Representatives of the bureau have identified the most popular types of attacks on projects related to decentralized finance among attackers

30.08.2022 - 12:20

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What’s new? The US Federal Bureau of Investigation (FBI) has issued a warning to investors about vulnerabilities in decentralized finance (DeFi) platforms. Representatives of the bureau called three of the most popular types of attacks on such projects and urged citizens to carefully study platforms, protocols, and smart contracts before investing. The FBI also cited data from analysts at Chainalysis, which found that criminals stole $1,3 billion in cryptocurrency in Q1 2022, and 97% of that amount was stolen from DeFi platforms.

The FBI’s report

What kind of attacks do criminals use? According to the FBI, the first type of attack involves initiating flash loans and exploiting smart contracts, due to which attackers can borrow large numbers of digital assets without collateral.

The second type of attack involves exploiting signature verification vulnerabilities in bridges between networks, allowing all funds to be withdrawn from the project. Another exploit option is to manipulate the price oracle and conduct leveraged trades, in which case hackers benefit from price calculation errors in trades.

The FBI stressed that investing involves risk and called for making sure that the DeFi platform code has been audited by at least one independent company before investing.

In July, representatives of the bureau warned about the emergence of a large number of fraudulent cryptocurrency applications disguised as real companies and financial institutions. The total damage to victims exceeded $42,7 million.

An August study by Chainalysis showed that $2 billion has been stolen from cross-chain protocols since the beginning of the year. These hacks accounted for 69% of all exploits in 2022. Analysts noted that bridges are becoming increasingly attractive to hackers as the volume of assets flowing through them grows.

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