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DeFi Platforms Need to Beef Up Security, Former Prosecutor Says
Ari Redbord, who now works at crypto sleuthing firm TRM Labs, says attackers are becoming more sophisticated.
Updated May 9, 2023, 4:05 a.m. Published Dec 29, 2022, 4:58 p.m.
Cracking down on crypto hacks will require hardening cyber defenses, Ari Redbord, head of legal and government affairs at crypto sleuthing firm TRM Labs, told CoinDesk TV’s “First Mover” on Thursday.
Redbord, a former prosecutor for the Department of Justice, said that finding strategies to identify and trace illicit activity will mean developing better “blockchain intelligence tools” that can identify new mixers before bad actors can get to them.
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“Bad guys are getting better, and their tactics are becoming more sophisticated,” Redbord said. “But the reality is the tools, regulation and the investigators and law enforcement are also becoming more sophisticated.”
Read more: This Was the Worst Year for Crypto Hacks. Here’s How 2023 Can Be Better / Opinion
According to TRM Labs, more than $3.6 billion in funds have been drained in crypto this year. About 80%, or roughly $3 billion, targeted decentralized finance (DeFi).
That's because many DeFi platforms are new and haven't developed robust cybersecurity tools yet and because the platforms have a lot of liquidity, he said.
During the same segment on "First Mover," Erin Plante, vice president of investigations at Chainalysis, another crypto sleuthing firm, said that many attacks are occurring on bridges that are used to transfer assets between different platforms.
Chainalysis found that “sophistication in money laundering” is becoming harder to decipher as bad actors look to cash out on centralized exchanges that are likely to be unaware that the funds are stolen because the bad actors have hidden the funds' source through the use of multiple mixers.
Crypto mixers, which operate like black boxes, give users the ability to send and receive bitcoin (BTC) anonymously.
“There’s really a need to continue to evolve the intelligence and the tools to be able to identify the new mixers that are popping up in those places,” Plante said.
Read more: Are Crypto Mixers Legal? / Opinion
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