FBI to crack down on crypto thieves

LAGOS (CoinChapter.com) — The United States Federal Bureau of Investigation (FBI) has warned investors in the blockchain and cryptocurrency space over the increased number of cybercriminals in the decentralized finance industry.

In detail, through its official Twitter account, the FBI warned crypto investors of cybercriminals’ ploys to exploit vulnerabilities within the DeFi ecosystem to steal crypto. It explained that cybercriminals exploit vulnerabilities in smart contracts that govern DeFi platforms to exploit crypto platforms.

Notably, DeFi hacks have been increasing lately, with over $2 billion stolen by cybercriminals in 2022, according to the Chainalysis report. As a result, the FBI observed that cybercriminals intend to take advantage of investors’ interest in cryptocurrencies to exploit them.

The Bureau further encouraged investors who have been ripped off their DeFi investments to contact the FBI via the Internet Crime Complaint Center or their local FBI field office, indicating ongoing plans to crack down on these elements.

The FBI revealed that in the first quarter of this year, cybercriminals stole $1.3 billion in cryptocurrencies. Additionally, it revealed that the DeFi platform exploit has been on a steady decline in the last three years. Notably, from only 30% in 2020, DeFi platforms registered 72% of exploit suffered in the space in 2021 and currently stands at 97% so far this year.

Additionally, the FBI highlighted cases where hackers used a signature verification vulnerability to steal $321 million from the Wormhole token bridge. Last month, it also mentioned a flash loan attack used to exploit Solana-based DeFi protocol Nirvana.

FBI Recommendations Towards Curbing Exploits

Meanwhile, in a blog post, the FBI recommended that investors research DeFi platforms extensively before use. The agency also instructed investors to seek advice from a licensed financial advisor before investing in any project.

“Ensure the DeFi investment platform has conducted one or more code audits performed by independent auditors. A code audit typically involves a thorough review and analysis of the platform’s underlying code to identify vulnerabilities or weaknesses in the code that could negatively impact the platform’s performance.”

FBI recommended.

Moreover, the FBI also advised the DeFi platform to institute real-time analytics and monitoring software to protect users. It urged DeFi platforms to ensure strict code testing to identify vulnerabilities and respond to suspicious activity quickly. It said:

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

More Efforts Towards Ending Crypto Crimes

Additionally, it is worth noting that this isn’t the first time the FBI has issued a warning concerning crypto activities. Last month, the agency noted that cybercriminals are posing as legitimate investment firms and cryptocurrency exchanges to defraud investors.

It noted that tens of millions of dollars from more than 200 people had been stolen by convincing them to download mobile apps and deposit cryptocurrency into wallets owned by the perpetrators. Notably, the Bureau warns financial institutions and investors to protect themselves against such schemes.

Additionally, earlier this year, U.S. Deputy Attorney General Lisa Monaco announced the FBI was stepping up its efforts to address crime in the digital asset space with the launch of the Virtual Asset Exploitation Unit. The specialized team aims to prevent cryptocurrency-related crimes and disrupt international criminal networks.