Former DoJ prosecutor urging DeFi platforms to integrate robust security measures

Trending 8 months ago

Ari Redbord, a erstwhile authoritative with the US Department of Justice (DoJ), present serving arsenic Head of Legal and Government Affairs astatine TRM Labs, accidental hackers are getting much sophisticated. To support themselves, helium is urging DeFi platforms to make and instrumentality robust cybersecurity measures to forestall losses.

In his assessment, the ineligible main told CoinDesk successful an interrogation that identifying and tracing illicit enactment connected DeFi platforms volition necessitate enhanced “blockchain quality tools” to observe and way cryptocurrency mixers earlier atrocious actors tin launder funds. These tools volition assistance to fortify the information and integrity of trustless protocols, enabling instrumentality enforcement and cybersecurity experts to way and forestall amerciable activities.

He besides stated that portion those seeking to prosecute in illegal enactment wrong the DeFi industry are becoming sophisticated, regulations, tools, and individuals are being improved arsenic a counteractive measure. Therefore, successful airy of the inevitable technological and regulatory evolution, Ari advises DeFi platforms to continuously accommodate and amended their information measures to enactment up of the curve.

TRM Labs reported that implicit $3.6 cardinal successful cryptocurrency was mislaid to fraud successful 2022, with astir $3 cardinal targeting DeFi protocols whose liquidity is high, a honeypot for cybercriminals. Ari said astir DeFi protocols are falling to hackers due to the fact that they are caller and person yet to make robust information measures to support clients’ funds safe.

Techniques cybercriminals employ

The US Federal Bureau of Investigation (FBI) had warned DeFi networks astir imaginable attacks, stating that hackers exploit vulnerabilities successful the contracts that govern these networks. They are advising DeFi platforms to beryllium vigilant and instrumentality steps to unafraid their systems to support against these types of threats.

The investigative bureau outlines 3 cardinal methods hackers usage to people DeFi platforms. One enactment is to initiate a flash loan, arsenic was done successful the November 2021 battle connected the Ethereum DeFi Initiative bZx, which resulted successful the theft of $55 cardinal in bitcoin. Another method is to onslaught flaws successful a DeFi platform’s token bridge, arsenic was observed earlier successful August with the Nomad token bridge.

The FBI besides revealed a 3rd strategy involving altering cryptocurrency rates by attacking galore flaws, specified arsenic reliance connected a azygous pricing oracle. This method was utilized successful the April 2022 Deus Finance exploit, during which criminals got distant with $13.4 million.

Source Cryptonews