The government agency warns about the risks of DeFi platforms as malicious actors use them to commit fraud. Since hackers seek cryptocurrencies for their untraceability, the FBI recommends users ensure whether those companies have undergone audits.
The Federal Bureau of Investigation (FBI) recently warned investors of planned frauds to steal user funds. The government agency also told them about the risks of using decentralized finance platforms.
The FBI recommended conducting extensive research on DeFi platforms, smart contracts and protocols before using them. It argued that it would allow understanding the potential risks of investing in them.
The FBI Recommends Ensuring DeFi Platforms Have Undergone Audits
Among other things, DeFi investors must consider using platforms whose codes have undergone audit at least once. The FBI recommends ensuring that independent auditors have performed one or more code audits on them.
They explained that a code audit usually involves a thorough review and analysis of the underlying code of the platform. That examination aims to identify any vulnerabilities or weaknesses that could affect its performance negatively.
The FBI said it had monitored hackers that took advantage of vulnerabilities in the smart contracts governing DeFi platforms. Those criminals reportedly used an investment strategy or self-executing contracts written directly in code lines on a distributed decentralized blockchain network.
The victims cannot claim the profits criminals have made through those hacks. The FBI told investors to contact it if they suspected hackers had stolen their cryptocurrency investments.
The Numbers of Hacks on DeFi Platforms Is Rising
The FBI highlighted that the hackers spamming the industry target investors that use the complex cross-chain functionality and open nature of DeFi platforms.
The government agency explained that cybercriminals take advantage of security flaws in the smart contracts governing DeFi platforms.
Between January and March, criminals stole around 97% of the 1.3 billion worth of cryptocurrencies from DeFi platforms. That represented an increase of 72% compared to 2021 and 30% to 2020.
Furthermore, hackers have also stolen crypto assets using flash loans, causing their victims to lose USD 3 million.
The FBI Also Gives Recommendations to DeFi Platforms
Users of DeFi platforms have the opportunity to borrow and lend crypto similarly to banks. However, no insurance backs those assets, and a lack of government policies to regulate them makes them more vulnerable to attack.
The FBI recommends that DeFi platforms implement code analysis, monitoring, and testing to address vulnerabilities that might lead to smart contract exploit.
Over the last few years, experts have advised that companies implement security software using multi-factor authentication (MFA). However, those platforms have not yet adopted it, which the FBI considers would be the most effective and sustainable approach.
Cybercriminals are aware of the relevance of cryptocurrencies, evident in frauds on DeFi platforms. That has led government security agencies to give recommendations to those wanting to invest in those assets to avoid losing money.
Meanwhile, Bitcoin is trading at around USD 20,000 and has accumulated a 5% gain over the last 24 hours. While its daily trading volume is above USD 25.50 billion, its market capitalization is about USD 500.75 billion, according to CoinGecko.
By Alexander Salazar
