Cyberattacks Cost DeFi Sector $100 Million in 2020

Cyberattacks Cost DeFi Sector $100 Million in 2020

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The decentralized finance sector, better known as DeFi, suffered heavy financial losses from cyberattacks in 2020. According to a recent report by Ciphertrace, a cryptocurrency forensics and blockchain threat intelligence firm, hackers stole nearly $100 million from DeFi platforms. Furthermore, the numbers suggest that a whopping 40% of all crypto-related attacks targeted DeFi in the first half of the year, with the decentralized system also accounting for 21% of the overall hacking onslaughts in 2020. But with that in mind, it should be noted that the value of cryptocurrency frauds dropped to $1.8 billion compared to $4.5 billion in 2019

In detail, Ciphertrace said cybercriminals got away with $51.1 million from DeFi thefts between January and June this year. Meanwhile, the report recorded a loss of $47.7 million since July. The decentralized ecosystem is an easy target for hackers and scammers due to the absence of a regulatory framework and the lack of security verification. Anonymity is also an attractive factor for bad actors and could make DeFi a cybercrime haven. Ciphertrace listed three DeFi protocols that fell victim to cybercrime, resulting in millions of dollars in losses. BZx was hacked three times, with a total of $9 million stolen, while dForce lost $25 million in April (the dForce hacker later returned the stolen funds). The most recent attack was against Harvest.Finance as hackers got their hands on $24 million.

On the other hand, centralized exchanges and crypto service providers have better protection against online threats. They are compliant with certain regulatory framework policies, like anti-money laundering (AML) and know-your-customer (KYC). CipherTrace CEO Dave Jevans said these platforms adopted more security procedures. “They have taken the guidance and implemented the procedures to secure their funds better. So, you’re going to see fewer mass-scale hacks,” he added.

To reduce cyber threats, especially during online banking or crypto transactions, use a VPN to encrypt your traffic and hide your IP address. Visit TheVPN.Guru for detailed VPN reviews and how-to guides, as well as other online security tips.

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