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FBI Says Investors Should Take Precautions Before Putting Money on Decentralized Finance Platforms

Cybercriminals are increasingly exploiting security flaws in smart contracts to steal cryptocurrency, according to the Federal Bureau of Investigation. in the was published on Monday (via bleeding computer), the agency warned investors about a significant increase in attacks targeting decentralized finance platforms.

Between January and March of this year, hackers stole $1.3 billion worth of cryptocurrency, with nearly 97 percent of that money coming from DeFi platforms, the FBI said. . That’s an increase from 2021 and 2020, when DeFi-related thefts accounted for 72 percent and the source of all stolen cryptocurrencies 30 percent. The agency has seen criminals employ a variety of methods to fleece DeFi platforms. In one case, the hackers used a so-called to steal approximately $3 million in cryptocurrency. In a separate attack targeting a signature verification vulnerability in a platform’s token bridge, cybercriminals made off with $320 million.

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Many of the most prolific hacks in recent months fall into those categories of attacks. For example, the largest cryptocurrency heist ever seen by the Lazarus Group, a North Korean state-sponsored hacking collective, . The group reportedly exploited a backdoor in a remote procedure call node in axis creator Sky Mavis to fake withdrawals using compromised private keys. More recently, users of the Nomad bridge lost $200 million worth of crypto due to a misconfiguration.

The FBI advises investors to take some 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 employ. Also, only put money into a company or business that has paid for independent code audits. You also want to avoid investment groups with extremely limited time frames 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 should seek the advice of a licensed financial advisor when in doubt.”

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