Technology

‘This is the jungle’: Law enforcement slowly waking up to the threat of DeFi exploits

At the end of August, the FBI issued a public service announcement on the susceptibility for cybercrime in DeFi (decentralized finance), the growing crypto segment of financial applications backed by blockchain technology. Of the $1.3 billion stolen in cryptocurrencies in the first three months of 2022, 97% came from DeFi platforms. The warning did nothing to deter cybercriminals, who launched flash loan attacks on the Avalanche blockchain and the New Free DAO protocol the following week that totaled nearly $2 million. According to data from investment platform DeFiYield, $211 million was lost in decentralized finance hacks just in August. Cybersecurity experts say the timing of the FBI warning—several years after DeFi exploits began—illustrates how slow governmental agencies and technological solutions have been to catch up to the vulnerabilities of the ecosystem. “Law enforcement is reactionary to what’s happening out there,” said Chris Tarbell, the co-founder of the cybersecurity firm NAXO and a former FBI special agent who was instrumental in taking down the notorious Silk Road marketplace. “It takes time because it’s such an advanced technology.”

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OODA Analyst

OODA Analyst

OODA is comprised of a unique team of international experts capable of providing advanced intelligence and analysis, strategy and planning support, risk and threat management, training, decision support, crisis response, and security services to global corporations and governments.