FBI warns: 3 ways hackers steal crypto

Cyber ​​criminals are getting smarter and even though most information on blockchains is public, they are often not averse to it.et hacking crypto companies and wallets. The FBI warns that DeFi platforms in particular are easy targets for hackers.

DeFi popular with crypto hackers

According to the Federal Bureau of Investigation, cybercriminals stole $1.3 billion worth of cryptocurrencies between January and March 2022. Nearly 97% of that would come from Decentralized Finance (DeFi) platforms. For this it cites a report from April blockchain researcher Chainalysis.

flash loan

There are three main ways to hack into a DeFi platform, according to the US institute. The first is through a flash loan. This is a loan that must be repaid before the smart contract expires – usually not much more than a few seconds.

You do not need collateral for such a ‘flash loan’, which gives you a lot of extra options. For example, you can use it to exchange collateral that you use for something else for another type of collateral, or for arbitration-to trade. You can also refinance debts with it.

But criminals can also use it. That’s what happened in 2020 with the DeFi protocol bZx. A flaw in the protocol allowed attackers to double their tokens through such a loan, all the while tricking the lender into thinking the loan has been paid off.

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Bridge hacks

A second vulnerability resides in ‘bridges’ connecting DeFi protocols. That’s what happened with the Nomad hack early this month. This protocol suffered a loss of about $200 million due to a bug that caused wrapped tokens to be removed from the protocol, thanks to the bridge functionality.

Manipulating crypto prices

The third way may be easier to understand: manipulating prices on the protocols. This happened to Deus Finance, which lost millions of dollars in crypto due to a small vulnerability in the software. The hacker also used a flash loan for this, but only applied for it after he caused the price of the DEI token to rise sharply. The difference was the win, which he ran off with.

It’s no secret that DeFi platforms are popular with hackers. CoinGecko wrote last month that the DeFi market has shrunk hard. Hacks were a major cause in addition to falling crypto prices. Despite the fact that the market has become almost 75% smaller, users still remained active.

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