FBI Warns Investors of Cybercriminals Targeting DeFi Platforms

The Federal Bureau of Investigation (FBI) of the United States has issued a public service announcement warning investors of the potential risks of losing funds to cybercriminals through decentralized financial (DeFi) platforms. It disclosed that investors had lost over $1.6 billion to DeFi exploitations in the first quarter of 2022.

In the announcement, the FBI stated, “Between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms, according to the US blockchain analysis firm Chainalysis.”

The announcement listed some of the risks that investors in DeFi platforms may face, as well as potential solutions.

Apart from the threats, the agency believes cybercriminals are targeting smart contracts of DeFi platforms.

“Cyber criminals are increasingly exploiting vulnerabilities in the smart contracts governing DeFi platforms to steal cryptocurrency, causing investors to lose money.”

According to the FBI, criminals are taking advantage of “the increased investor interest in cryptocurrencies” to fleece investors of their resources. “The complexity of cross-chain functionality and the open source nature of Defi platforms “also helps them achieve this.

The law enforcement agency advised investors to do their due diligence before using any DeFi platform. It also highlights that investors are advised to “ensure the DeFi investment platform has conducted one or more code audits performed by independent auditors” before using them.

The recommendations were not only for investors, as the FBI advised DeFi platforms to “institute real-time analytics, monitoring, and rigorous testing of code in order to identify vulnerabilities and respond to indicators of suspicious activity more quickly.”

“Develop and implement an incident response plan that includes alerting investors when smart contract exploitation, vulnerabilities, or other suspicious activity is detected. “