Cyberattacks Cost Decentralized Finance $30 Billion: Study Reveals

As the world of digital finance is evoling, cybercriminals are cashing in, causing financial mayhem. A groundbreaking study by researchers from the Complexity Science Hub and the University of Montreal has shed light on the staggering scale of this issue, revealing a minimum of $30 billion in damages, a sum rivaling Luxembourg's 2022 state revenue.

Decentralized Finance (DeFi), which offers financial services through blockchain-based decentralized computer programs, is the playground for criminal attacks. The research team documented 1,155 criminal incidents from 2017 to 2022. This snapshot demonstrates that this dark underworld is growing, with 435 reported crimes in 2022, a significant increase from just 16 in 2017.

While DeFi saw more attacks, centralized financial platforms (CeFi) incurred greater losses due to their inherent vulnerabilities. The largest loss of $3.6 billion occurred with Africrypt, highlighting the dangers of centralized management systems.

The study highlights that technical weaknesses at the protocol level are the primary attack vector, emphasizing the need for better security measures. As DeFi continues to expand, it remains a target, with criminals exploiting market manipulation and irretrievably lost stolen funds.

While the study reveals the extent of the issue, tracking illicit money flows in DeFi remains a challenge. The "DeFi Trace" project aims to tackle this problem, offering hope in the battle against financial cybercrime.

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by Irfan Ahmad via Digital Information World