Number of DeFi hacks can increase significantly in 2022

Tue 14 Dec 2021 ▪ 7h00 ▪ 3 min read — by Rudy Bauer

DeFi has become one of the fastest growing segments of the crypto space this year, which has attracted the attention of criminals. Since January 2021, around 200 DeFi hacks have taken place. Analysts and industry representatives suggest that the number of hacks and the amount stolen could increase next year.

DeFi attracts criminals

Having become one of the fastest-growing segments of the crypto space, decentralised finance (DeFi) is increasingly attracting the attention of hackers. Some 200 hacks have already taken place this year, but many believe the industry will be subject to much more criminal attacks in the future.

As AMBCrypto reports, cryptocurrency platform AscendEX’s (formerly Bitmax) hot wallets were hacked the other day, causing the trading platform to lose 77.7 million (~£58,8 million). And just yesterday, Vulcan Forged announced that 96 private keys were stolen from its crypto-gaming ecosystem. The loss amounted to almost $140 million (~£106 million).

Vulcan Forged has returned some of the funds to affected users. Twitter followers hope that the remaining tokens stolen by the attackers will be destroyed.

Benjamin Whitby, who oversees regulatory affairs at cross-chain protocol Qredo, on decentralised finance, recently speculated that DeFi’s strong growth will result in the world’s first billion-dollar hack next year.

Protecting investors

As part of the security and protection against possible risks, the IOHK suggests that investors conduct their own research. Representatives of the company, which supports Cardano, add that each DApp developer is responsible for the operability and reliability of the applications created.

However, the lack of restrictions continues to be a key source of concern. Many DeFi offerings and products, according to SEC Commissioner Caroline A Crenshaw, are similar to products and functions in the traditional financial industry. DeFi, on the other hand, is difficult to oversee, according to Hong Kong’s securities regulator, since it is continually evolving, unlike traditional finance.

Chief compliance officer for Asia-Pacific at Gemini Andy Meehan said there’s a need to clearly define what DeFi is and what mechanisms are most appropriate to regulate the industry. He added that existing financial regulations cannot be applied.

Hopefully, as the DeFi industry continues to evolve, security will also improve. If users are confident that their savings are protected, they will be encouraged to interact with decentralised finance.

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Rudy Bauer

Photographe, Vidéaste, webdesigner et enfin rédacteur pour CoinTribune: l'image, le digital et la blockchain sont mon dada.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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