Investors and traders are paying attention to the cryptocurrency market, even though there are more scams and frauds. Cybercriminals have stolen $180 million worth of cryptocurrency from a project called Beanstalk Farms, a project called Decentralized Finance (De-Fi).
Beanstalk is a platform that rewards people for giving money to a central fund pool that keeps the value of one token at $1.
“Beanstalk was hacked. We’re investigating the attack, and we’ll let you know as soon as possible, the company said in a tweet.
Hackers could get into the platform by taking advantage of Beanstalk’s majority vote governance system. Some protocols use it as an essential part of them.
PeckShield, a company that analyses blockchains, was the first to notice the attack.
The Beanstalk attacker got a “flash loan” through the decentralized protocol Aave, and they used that money to get close to $1 billion worth of cryptocurrency assets. It took these to get 67 per cent of the vote in this project.
According to the report, the attacker paid back the flash loans right away, making a profit of $80 million.
It wasn’t the first time hackers used the Defi platform to steal cryptocurrencies worth millions of dollars, but it wasn’t the only one. Cryptocurrency tokens worth $120 million were stolen from the Blockchain-based Decentralized Finance platform BadgerDAO in January 2018. Ironically, hackers emptied several cryptocurrency wallets before the platform could stop cyberattacks, which was good.
They also took $80 million worth of cryptocurrency from Qubit Finance in December 2017, when the company was still in business. Qubit Finance is also a Decentralized Finance (Defi) platform, so it can help people make money.
We are blaming a group called Lazarus for stealing $625 million worth of cryptocurrency from the Ronin Network, owned by Sky Mavis, a US-based developer group.
The number of such incidents has been rising, which has raised questions about the security of Defi platforms.
How Thieves Gets Hands-on Cryptocurrency in a Virtual World.
- Hacking into the exchanges
There are exchanges where Bitcoin and other cryptocurrencies are bought, sold, and stored, just like exchanges for real-world goods.
But Cryptocurrency investors and people who run exchanges often don’t like central control and don’t like strict rules. This can lead to lax security.
“Crypto exchanges have a lot of Cryptocurrency at any given time,” says Manuel Valente, the CEO of Coinhouse, a French company that helps people buy and sell crypto.
There are servers, and sometimes bad people can get into them and steal money from them. It’s mainly because there isn’t enough security, says the man. He says that some platforms still keep passwords on their servers.
A man says that you can get the money if you can break into the server and get the passwords. Then, once you have the passwords, you move the bitcoins from one address to another so that no one else can get them.
2. Getting into the blockchain
The blockchain is a chain of code made up of interlocking blocks, and it is the foundation for all things crypto. In crypto, it keeps track of all the transactions that have been made.
When a block of code is linked together, it is impossible to change a block of code without changing the whole chain. This is the basis for the claims of security made by people who say crypto is a good thing.
As long as one group has more than 50% of the blockchain, it could start changing transactions, blocking new ones, or double-spending coins. This is called “double spending.”
An exchange called Gate.io said it lost $200,000 in an attack like this in 2019. But experts say it would be tough to attack big players like bitcoin.
The author of the book “Crypto Wars: Faked Deaths, Missing Billions, and Industry Disruption” says that such an attack would be challenging and energy-consuming.
There is no way to do this now because of how much energy bitcoin would use.”
3. There is a lot of crime that is close to crypto.
Many crypto scams don’t have anything to do with how the technology works, and they’re more like old-fashioned extortion or confidence tricks where the criminals ask for payment in crypto instead of cash.
People who make a new coin are very excited about it and try to increase its value, but when the price reaches a high point, they dump all of their cash, leaving many people broke.
An analysis firm says that such scams, which aren’t unique to crypto, made scammers $7 billion in 2019 but dropped by a lot.
Stanford: “The main scam hasn’t been about crypto so much as it has been about using the idea that people will get rich quickly to get people to invest.” This is what he says.
She says the newness of crypto and its appeal as a way to get rich quickly has helped scammers to no end.
4. The net is shut.
Stanford says that these Ponzi-style scams became well-known because of how they worked. Between 2016 and 2018, the cons were at their peak.
In the past, she said that the market had grown up and people were more knowledgeable, law enforcement and regulators were more involved, and there were a lot of analytical tools that allowed the currencies to be traced.
Chainalysis said that there was a massive drop in crime related to crypto last year.
Stachtchenko points out that many of the major platforms have now made their security more robust to fight hackers, which is good news for people.
Some people have even bought “bunkers,” a digital safe, says the man who spoke.
He says that monitoring has increased so much that even if criminals hide their crypto for years, they won’t be able to spend it, even though they’ve done that for years.
A man says that “everyone will know as soon as the stolen bitcoins start moving again.” In the past, almost no company would take care of stolen bitcoins.
