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A similar idea to smart contracts, DeFi is about transparency and open source code as an ideology. Unfortunately, in practice this means scrawny, multimillion-dollar projects that are often held together with tape and gum.
“There are several things that make DeFi more vulnerable to hacking,” explains Grauer. “The code is clear. Anyone can go over it to look for bugs. That’s a big problem we’re seeing that isn’t on centralized exchanges.”
Bug bounty programs, where companies pay hackers to find and report vulnerabilities, are one of the tools in the industry’s arsenal. There is also a cottage industry of crypto audit firms that will give your project a seal of approval and enter your project. However, a cursory glance at the worst crypto hacks of all time shows that an audit is not a silver bullet – and there is often little or no responsibility for the auditor or projects when attacks occur. The wormhole was inspected by security firm Neodyme just a few months before the theft.
Most of these attacks are organized. North Korea has long hackers will steal money to finance a regime It has largely broken with the traditional economy of the world. Cryptocurrency in particular has been a goldmine for Pyongyang. The country’s hackers have stolen billions of dollars in recent years.
However, most hackers targeting the cryptocurrency are not funding a rogue government. Instead, the already robust cybercrime ecosystem fires opportunistic shots at weak targets.
The tougher challenge for the budding cybercrime boss is to successfully launder all the stolen money and turn it from code into something useful – cash, for example, or in North Korea’s case, weapons. This is where law enforcement comes in. For the past few years, police around the world have been investing heavily in blockchain analysis tools to track and in some cases even recover stolen funds.
The proof is the latest Ronin hack. Two weeks after the robbery, the crypto wallet holding the stolen currency was added to the US sanctions list as the FBI was able to link the wallet to North Korea. This will make it difficult to redeem the bounty, but certainly not impossible. And while new monitoring tools are starting to shed light on some hacks, law enforcement’s ability to recover funds and return them to investors is still limited.
“Money laundering is more complex than the hackers themselves,” said Christopher Janczewski, formerly the chief litigation agent at the IRS specializing in cryptocurrency litigation. said MIT Technology Review.
For now, at least the big risk remains a part of the crypto game.
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