The decentralized finance (DeFi) sector continues to attract increased attention from cryptocurrency investors. ForkLog has collected the most important events and news of recent weeks in a digest.
Key indicators of the DeFi segment
The volume of blocked funds (TVL) in DeFi protocols remained almost unchanged – $38.5 billion. The leader was Lido with $14.6 billion, while the second and third places in the ranking were held by AAVE ($4.86 billion) and JustLend ($4.69 billion ) respectively.
TVL in Ethereum applications fell to $21 billion. Trading volume on decentralized exchanges (DEX) over the past 30 days amounted to $35.4 billion.
Uniswap continues to dominate the non-custodial exchange market, accounting for 57.9% of total turnover. The second DEX in terms of trading volume is PancakeSwap (15.1%), the third is Dodo (8.3%).
Mixin Network was hacked for $200 million
On September 23, an unknown person hacked the cloud service provider Mixin Network and withdrew about $200 million in digital assets.
Following the report from Slow Mist analysts, protocol representatives also confirmed the incident. According to the statement, the network’s database was exploited. The developers have temporarily suspended deposits and withdrawals of funds.
BlockSec analysts reported that the hack could have been caused by an attack on cloud services where the protocol stored private keys for depository addresses. As a result, the attacker withdrew funds from about 10,000 wallets in descending order of balances.
The protocol developers offered the hacker a reward of 10% of the stolen funds for their return.
Mixin Network is a peer-to-peer cryptocurrency trading network designed to scale and speed up transactions. The protocol supports Bitcoin, Ethereum and several other popular coins.
The head of the CFTC recalled the need for supervision of DeFi projects
The Chairman of the US Futures Trading Commission, Rostin Benham, stated the advisability of regulating the activities of DeFi protocols. He compared the situation in the sector to seeing an “unlicensed doctor.”
“We must not wait for victims to appear. We must be proactive and ensure critical market oversight, strong cybersecurity and system safeguards, and customer protection. This is our mission […]. If you need an analogy, think: Would you feel comfortable on the road if only some people were required to have a license? Or, if you had a choice, would you trust an inexperienced or unlicensed doctor,” Benham said.
Elliptic: attackers laundered $7 billion through cross-chain solutions
The volume of illegal crypto assets laundered using cross-chain transactions reached a record $7 billion in a year. This is stated in a report from Elliptic.
Analysts included three categories of this criminal activity:
- decentralized exchanges that make it possible to exchange cryptocurrencies, including within the same blockchain;
- cross-chain bridges through which coins move between networks;
- crypto exchange services that do not follow the rules KYC.
In the first “State of Online Crime” report published in October 2022, Elliptic experts counted $4.1 billion in assets laundered through these routes. According to their estimates, by the end of 2023 the figure should have been $6.5 billion.
“However, our latest $7 billion estimate demonstrates that online crime is growing at a faster rate than predicted,” the analysts stated.
In their opinion, the popularity of money laundering using this method is associated with:
- the transition of criminal activity from Bitcoin to other coins with attractive qualities such as confidentiality (Monero, etc.) or stable prices (stablecoins USDT, DAI, etc.);
- generating criminal proceeds in tokens other than digital gold, for example, as a result of hacking DeFi protocols;
- the lack of verification for cross-chain services, unlike centralized platforms;
- the lack of analytical tools that allow you to reliably track transactions between blockchains;
- enforcement actions against mixers and exchanges that do not comply with KYC rules, which has led to the search for alternatives.
Through decentralized exchanges alone, attackers laundered $3.9 billion in 12 months as of July 2023. Compared to the previous period, the figure increased by 82%.
Also on ForkLog:
- Analysts have assessed the impact of Lido liquid staking on Ethereum.
- Tether has stopped transferring USDT to fiat for a DeFi project from Singapore.
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