Crypto.com, Magic Eden, OpenSea users beware, FBI issues warning to DeFi platforms

With an alarming spike in the hacks and attacks on DeFi platforms, the FBI has issued a new warning. Cyber criminals exploiting vulnerabilities in smart contracts governing DeFi platforms have siphoned off $2.45 billion through their attacks and theft. Users of Magic Eden, OpenSea, LooksRare, NFT Launchpad need to beware of an attack on these DeFi platforms. 

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FBI warns DeFi platforms as cyber crimes are on the rise

Per data from The Block, a crypto intelligence platform, over $2.45 billion in DeFi tokens have been stolen by attackers since the beginning of 2022. Several tokens including Bitcoin, Ethereum and wrapped cryptocurrencies have been stolen in attacks on DeFi platforms. This is alarming for DeFi users, since funds on platforms are hit by frequent hacks by entities with malicious intent.

The FBI made a public service announcement on Tuesday. The announcement reads that exploits have resulted in massive losses for the investors and the FBI advised investors to conduct diligent research about DeFi platforms before using them. The bureau asked DeFi platforms to improve monitoring and conduct more rigorous code testing.

Since malicious actors have taken advantage of investors’ increased interest in crypto and the “complexity of cross-chain functionality and open source nature of DeFi,” there is an increase in instances of hacks and attacks in the ecosystem. 

The FBI addressed the issue with a specific case where hackers used a “signature verification vulnerability” to plunder $321 million from the Wormhole token bridge. FBI recommends due diligence since DeFi investments involve some risks and recommends users look for financial advice before making decisions on such platforms. 

The agency believes the platform’s protocols need to be sound and code audits need to be performed by independent auditors before traders invest in the DeFi and NFT ecosystem. MagicEden, OpenSea, Looks Rare and NFTLaunchpad are the key DeFi platforms where users could lose funds in the form of digital assets or collectibles in the event of a hack. FBI therefore recommends that DeFi platforms ramp up their security by testing their code regularly to identify vulnerabilities, along with real-time analytics and monitoring.