By George Ward
Ari Redbord, a one-time prosecutor at the US DoJ, has weighed in on the recent attacks in the DeFi space. According to Redbord, attackers have adopted sophisticated techniques and tools to attack DeFi platforms.
Hence, he urged DeFi networks to formulate proper security measures. Meanwhile, the official is now TRM Labs’ Head of Legal and Government Affairs.
Hackers Are Getting More Sophisticated – Redbord
While speaking during a recent interview, the legal chief noted that it would be difficult to identify and track illegal activities in the DeFi space. Hence, he recommends that the necessary authorities adopt “blockchain intelligence tools.”
Moreover, cybersecurity experts and law enforcement agencies are having a hard time tracking hackers. These tools will allow them to track crypto activities and arrest fraudsters right on their tracks.
Additionally, Redbord stated that hackers and fraudsters are becoming smarter and more sophisticated daily. Likewise, crypto regulators and policymakers must implement stricter regulations as a precautionary measure.
Therefore, the legal chief argued that DeFi platforms could not sit on the fence. He advised that they adopt stricter security measures and remain vigilant.
According to the TRM Labs executive, crypto platforms lost about $3.6 billion to fraudsters in 2022. The DeFi sector, which has high liquidity accounted for $3 billion.
Redbord noted that most platforms that have been hacked are new to the crypto space. Hence, their level of security is low.
The former prosecutor believed such platforms must embrace strict security measures to safeguard users’ funds. Some months ago, the United States Federal Bureau of Investigation (FBI) warned crypto investors and DeFi platforms.
According to the FBI, most hackers and attackers exploit vulnerabilities or bugs in smart contracts.
How Hackers Infiltrate DeFi Platforms
Furthermore, the FBI highlighted three ways through which hackers infiltrate DeFi networks. One of them is through the initiation of a flash loan.
Hackers used this technique to attack bZx, an Ethereum DeFi network, in November 2021. The hackers stole Bitcoin worth over $55 million in the process.
The second technique hackers use to attack the network’s token bridge. This technique is evident in the Nomad token and Ronin token bridge attacks.
The third strategy has to do with altering crypto price rates. This is possible, especially on platforms that use one pricing oracle. Earlier in April, fraudsters utilized this technique to attack Deus Finance, carting away $13.4 million.
Hence, the agency advised DeFi networks to check bugs and vulnerabilities regularly. The FBI also suggested that they scrutinize their smart contract codes properly before deployment.
The law enforcement agency believed these steps would make DeFi platforms bulletproof.