FBI says investors should take precautions before putting money into decentralized finance platforms

According to the Federal Bureau of Investigation, cybercriminals are increasingly exploiting security flaws in smart contracts to steal cryptocurrency. In an article published on Monday (via beeping computer), the agency warned investors of a significant increase in attacks targeting decentralized financial platforms.

Between January and March this year, hackers stole $1.3 billion worth of cryptocurrencies, with nearly 97% of that money coming from DeFi platforms, the FBI said. This is an increase from 2021 and 2020, when DeFi-related thefts accounted for 72% and 30% the source of all stolen crypto. The agency has seen criminals using various methods to scam DeFi platforms. In one case, hackers allegedly used a to steal around $3 million worth of cryptocurrencies. In a separate attack targeting a signature verification vulnerability in a platform’s token bridge, cybercriminals grabbed $320 million.

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Many of the most prolific hacks in recent months fall into these categories of attacks. For example, the biggest crypto heist ever seen the Lazarus Group, a North Korean state-sponsored hacking collective, . The group allegedly exploited a backdoor in a remote procedure call node from Axie creator Sky Mavis to forge fake withdrawals using compromised private keys. More recently, one saw Nomad Bridge users lose $200 million worth of crypto due to a misconfiguration.

The FBI recommends that investors take a few precautions before risking their money with a DeFi platform. You need to research the platform you want to invest in, as well as the details of the smart contract they use. Also, only pay money to a company or company that has paid for independent code audits. You also want to avoid investment pools with extremely limited time limits to join.

“Cybercriminals are looking to take advantage of increased investor interest in cryptocurrencies, as well as the complexity of cross-chain functionality and the open-source nature of DeFi platforms,” the FBI said. “Investors should make their own investment decisions based on their financial objectives and financial resources and, if in doubt, should seek advice from a licensed financial adviser.”

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