In the U.S. alone, SIM-swapping attacks resulted in $72 million worth of losses last year, four-million dollars more than 2021, according to the Federal Bureau of Investigation. In a 2022 public service announcement, the FBI defined SIM swapping as a “malicious technique where criminal actors target mobile carriers to gain access to victims' bank accounts, virtual currency accounts, and other sensitive information.” The PSA noted that threat actors “primarily conduct SIM swap schemes using social...

Verified crypto-exchange accounts have become a hot commodity on the dark web, with login credentials available for as little as $20, according to May data from threat intelligence firm Privacy Affairs. But the price for verified crypto accounts has been steadily rising, with some ‘logs,’ a darknet slang term for stolen or nominee credentials, fetching as much as $2,650 per account, Privacy Affairs research shows. While the U.S.-based Bittrex crypto exchange hosts the cheapest logs,...

Annualized data from blockchain forensics provider Chainalysis indicates that crypto-enabled crime has dropped precipitously through the first half of 2023, but cybercriminals are also continuously evolving new cash-out methods to cover their tracks. Chainalysis’s mid-year update found that crypto inflows to “known illicit entities” were down 65% compared to where they were last June. Meanwhile, crypto flows to high-risk entities, which generally entail “mixers” and non-compliant exchanges were down 42%. Crypto mixers are protocols that...

This article concludes our four-part series on the basic differences between traditional IT security and blockchain security. Previous articles discussed the security differences critical for node operators, smart contract developers, and end users. In many ways, Security Operations Center (SOC) analysts and node operators face similar blockchain-related security challenges. The scale of SOC operations brings with it unique security challenges. Reduced telemetry from decentralized infrastructure hinders SOC detection, but additional information available on-chain could drive...

This article is the third in a four-part series exploring the differences between traditional IT security and blockchain security.  Check out the first two articles in the series exploring the differences for node operators and application developers. This article explores how user security differs between traditional IT and blockchain environments.  While identical products and services may be hosted in traditional IT and blockchain environments, the differences between these ecosystems can have significant security implications for...

This article is the second in a four-part series discussing the differences between traditional IT security / cybersecurity and blockchain security.  Check out the first article in the series discussing the differences for node operators. This article focuses on the differences between application security (AppSec) for traditional applications and smart contracts.  While the first blockchains, like Bitcoin, were not designed to support smart contracts, their invention dramatically expanded the capabilities of blockchain platforms.  The ability...

Recent events like the FTX meltdown have sparked interest and conversations about how the incident could have been prevented.  In the case of FTX, the primary problem was that the platform did not hold sufficient assets to cover its user deposits and liabilities. What are Merkle Trees and Proofs? Proof of Reserves and Proof of Liabilities can use Merkle trees to prove certain facts while keeping data anonymous.  To understand how these schemes work, it is...

Blockchain is a rapidly-evolving technology with a great deal of interest and investment. Decentralized Finance (DeFi), in particular, has a great deal of money invested in it as well as a growing number of high-profile and expensive hacks.  Beyond DeFi, many companies, both large and small, are investing heavily in blockchain technology. As blockchain increasingly underpins major systems, securing this technology becomes increasingly vital.  Financial systems built on the blockchain can suffer significant losses due...

The most comprehensive ranked list of the biggest crypto hacks in history (Up until November 1, 2022. I suspect a larger one is just behind the corner) It wasn’t easy digging through the entire history of cybercrime involving cryptocurrencies, but I wanted to get to the bottom of which ones were the biggest in terms of total value of the stolen digital assets at the time of the incident. Two of the entries occurred while...

$566M worth of BNB was stolen from Binance’s cross-chain bridge BSC Token Hub, but how they responded to the hack will be the most memorable part. Decentralization is a hot button topic in web3, and Binance is (at the time of writing) the biggest crypto exchange by trading volume in the world. The recent hack of Binance’s native cross-chain bridge BSC Token Hub revealed to the world what many early adopters of blockchain technology already knew:...

Understanding how flash loans and governance work in DeFi to demystify the Beanstalk Farms Hack The only way to understand how the Beanstalk Farms decentralized credit-based stablecoin protocol exploit happened is to first understand flash loans, which are a little known financial tool unique to the DeFi (decentralized finance) space, as well as governance. A flash loan is, like it sounds, a very fast loan. It happens within a single blockchain transaction and no collateral is...

Code reuse is considered best practice in software engineering.  Reusing high-quality, secure code can speed development processes and often results in higher-quality code than software developed entirely from scratch.  Additionally, the reuse of high-quality, audited libraries reduces security risks by decreasing the probability that new vulnerabilities will creep into the code base. In open source communities such as the blockchain and crypto community, code reuse is even more strongly encouraged.  Open-source code released with permissive...

One attacker and hundreds of copycats looted the Nomad bridge for over $190 million; few did the right thing. Decentralization is a hot-button topic in 2022. To some, it seems like the solution to a variety of issues plaguing the so-called web2 ecosystem, such as the monopolization of social media, the centralized control over the flow of information, and bad data privacy and data monetization practices. Proponents of distributed blockchain technology offer web3 as the decentralized...

Proving knowledge of a secret is the basis of password-based authentication systems.  The assumption is that only you know your password.  If this is the case, entering your password into a system proves your identity and grants you access to your account. However, this approach doesn’t work as well on the blockchain, where everything stored on the digital ledger is publicly visible.  Any password or other secret included within a blockchain transaction would be revealed...

The $611M Poly Network exploit is the largest crypto hack to date in terms of mark-to-market value and all the stolen funds were returned, but the identity of the hacker is still unknown. Dubbed “Mr. White Hat” by the Poly Network security team, the anonymous perpetrator of the biggest crypto hack to date gave all the stolen crypto assets back within 15 days of the incident. But how was the hack carried out? Why did they...

Getting to the bottom of the exploit that led to one of the biggest hacks in the history of decentralized finance.  In order to understand the $160M Wintermute hack, we first need to understand algorithmic market makers and how they work in DeFi (decentralized finance), since that’s what Wintermute is. Imagine you’re the developer of a crypto project and you expect to get your token listed on a large exchange, even a top 10 such as...

What Are Blockchains Layers 0, 1, and 2? A blockchain is a complex, multi-layered system.  Bitcoin, the original blockchain, maintained a distributed and decentralized digital ledger on top of a peer-to-peer network.  Later blockchains, like Ethereum, added complexity by integrating smart contract functionality and the technology needed to support these programs that run on top of the blockchain. In addition to these various layers within a blockchain, there is now the concept of Layer 0, 1,...

A missing pile of Safemoon and other cryptocurrencies, accusations of broken promises, and then nothing. When a high-profile cyber attack takes place and hundreds of millions of dollars are lost, usually a healthy balance is struck between safeguarding information to protect ongoing investigations and maintaining a level of transparent communication with the public. In the case of BitMart’s security breach, they chose to keep a lot under wraps. We can still get a general idea of...

In recent years, many organizations have adopted more modern development practices, including Agile, Scrum, and DevOps.  The goal of these new processes is to improve the pace and efficiency of development by streamlining the development process and using automation whenever possible. One of the main shortcomings of most DevOps programs is that they overlook security, focusing on getting software released as quickly as possible.  As a result, tens of thousands of vulnerabilities reach production each...

The biggest crypto heist in history at the time it occurred in 2018 was an eye-opener for many reasons, not least of which for the way the stolen assets were being stored.  Seasoned crypto enthusiasts and early adopters of the disruptive new technology know now that safely storing your digital assets is half the battle, but it wasn’t always so. Insufficiently secured storage was the norm for almost a decade after Bitcoin’s creation, with many...