The FBI warns of decentralized finance exploits and losses – Bitcoin News

The FBI warns of decentralized finance exploits and losses – Bitcoin News

U.S. law enforcement agency the FBI has released a public service announcement warning people about the latest exploits criminals are using to steal bitcoin from people who have placed their money on decentralized finance (defi) platforms. Furthermore, the group urged crypto investors to conduct their own due diligence to ensure that the decentralized finance platforms they use have been independently audited.

The FBI Is Watching Cryptocurrency Exchange Platforms

The FBI has recently taken note of the increased focus fraudsters are placing on decentralized finance (defi) platforms in an effort to compromise their systems. The agency has released a public service notice to alert investors and defi platforms to the situation and provide solutions to try to stop these attacks.

The Federal Bureau of Investigation has become aware of three recent attacks that have allowed attackers to undermine decentralized finance protocols. These hacks involve launching flash loans, attacking signature verifications to empty cross-platform bridges, and manipulating cryptocurrency price pairs by abusing oracles that are used to update the price of a cryptocurrency asset in real time. Defi platforms and their investors reportedly lost $358 million due to these attacks.

Information for Defi Platforms and Investors

The FBI publishes a list of tips for avoiding dubious defi sites, while also reminding the public that investments carry risk and that those considering making a financial investment through these platforms should consult with a financial expert.

Among these tips is doing due diligence on platforms before committing capital to them, investing only in platforms that have undergone audits by third parties to reduce the risk of exploits, and being cognizant of the potential for changes to the crowdsourced code underlying these platforms due to the large number of actors with access to these repositories.

Investors weren’t the only ones who got advice, though; decentralized protocols have some of the weight in reducing the frequency and impact of such occurrences as well. The group recommends that decentralized financial protocols use real-time analytics tools to examine and detect suspicious actions, and then devise strategies to deal with these instances while also informing investors.

The FBI issued a warning in July about liquidity mining scams and the perils of phony cryptocurrency apps that steal bitcoin from investors.

Is the FBI’s latest warning regarding decentralized financial systems a cause for concern, and if so, why? Please share your thoughts in the space provided below.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.