Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
The decentralized finance (DeFi) ecosystem has been making waves in the cryptocurrency space for quite some time now. It has been gaining traction with its innovative applications and has been steadily building its user base. This past week saw some significant developments in the DeFi space, with the United States Securities and Exchange Commission’s (SEC) crackdown on crypto-staking services leading to uncertain consequences for the DeFi ecosystem.
Cybercriminals used various methods to siphon funds through hacks and exploits in 2022, amounting to over $2.8 billion in losses. The second week of February saw the Platypus protocol exploited, leading to losses of $8.5 million. In another exploit-related update, the hacker behind Mango Markets wants to keep disputed funds paid as a bug bounty.
The Financial Stability Board (FSB) stated that despite providing many novel services, DeFi does not differ substantially from traditional finance in its functions. The DeFi market saw a new bullish wave thanks to a price rally by Bitcoin (BTC) and other altcoins. The recent price rally helped the DeFi market regain its $50 billion total value locked.
SEC’s crypto staking crackdown has uncertain consequences for DeFi: Lido Finance
A crackdown by the U.S. securities regulator on crypto staking could have unintended consequences for decentralized finance, according to the head of business development at Lido DAO. Jacob Blish told Bloomberg in a Feb. 13 report that the most significant risk would be if the SEC eventually concluded that no U.S. citizen could interact with crypto staking services, including protocols.
The SEC’s crackdown on crypto staking services has created a lot of uncertainty in the DeFi space. This is because staking is a crucial part of the DeFi ecosystem, as it helps to secure the network and provide liquidity to the market. Blish further stated that the SEC could potentially classify staking as a security and this could have a significant impact on the DeFi space.
DeFi exploits and access control hacks cost crypto investors billions in 2022: Report
Cybercriminals used a variety of novel ways to carry out hacks and exploits in 2022, with over $2.8 billion of cryptocurrency stolen. According to a report from CoinGecko, which used data from DeFiYield’s REKT database, hackers used diverse methods to steal crypto in 2022. These methods include bypassing verification processes, market manipulation, ‘crowd looting,’ and smart contract and bridge exploits.
The report highlighted the fact that the majority of the losses were due to exploit-related hacks, with the majority of these losses coming from the DeFi space. The report also noted that access control hacks, such as phishing and social engineering, accounted for a significant portion of the losses.
BIS-funded regulator to probe DeFi entry points like stablecoins
The Financial Stability Board — the financial regulator funded by the Bank for International Settlements — is pushing international regulations for decentralized finance. On Feb. 16, the FSB issued a report on the financial stability risks of DeFi, highlighting major vulnerabilities, transmission channels and the evolution of DeFi. Despite providing many “novel” services, DeFi “does not differ substantially” from traditional finance (TradFi) in its functions, the authority said in the report.
The FSB argued that by trying to replicate some parts of TradFi, DeFi increases potential vulnerabilities due to the use of novel technologies, the high degree of ecosystem interlinkages and the lack of regulation or compliance. The FSB also noted that DeFi’s entry points, such as stablecoins, need to be closely monitored and regulated.
DeFi protocol Platypus suffers $8.5M flash loan attack, suspect identified
A potential suspect has been identified in the $8.5 million attack on the decentralized finance protocol Platypus. Blockchain security firm CertiK first reported the flash loan attack on the Avalanche-based stable swap platform through a tweet on Feb.16, alongside the alleged attacker’s contract address.
The attack occurred when the attacker took out a flash loan from the platform. The attacker then used the funds to purchase a token from the platform, which was then used to purchase other tokens. The attacker was then able to take out another flash loan, which was used to purchase more tokens, and so on. The attack resulted in the attacker making a total of $8.5 million in profits.
Mango Markets exploiter seeks to keep disputed funds paid as ‘bug bounty’
The alleged exploiter of the decentralized finance protocol Mango Markets, Avraham Eisenberg, is seeking to keep his share of crypto gained from his so-called “highly profitable trading strategy.” On Feb. 15, attorneys for Eisenberg filed a motion in a New York District Court objecting to a lawsuit from Mango asking for $47 million in damages plus interest starting from the time of Eisenberg’s October 2022 attack, which drained around $117 million from the protocol.
Eisenberg claims he found a bug in the Mango Markets protocol and used it to make a profit. He is now seeking to keep the funds he earned as a “bug bounty”, arguing that he was not responsible for the losses incurred by Mango Markets. The case is still ongoing and it remains to be seen what the outcome will be.
DeFi market overview
Analytical data reveals that DeFi’s total market value hit $50 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green with double-digit gains.
This past week has seen some significant developments in the DeFi space, with the SEC’s crackdown on crypto-staking services leading to uncertain consequences for the DeFi ecosystem. Cybercriminals used various methods to siphon funds through hacks and exploits in 2022, amounting to over $2.8 billion in losses. The Financial Stability Board (FSB) stated that despite providing many novel services, DeFi does not differ substantially from traditional finance in its functions. The DeFi market saw a new bullish wave thanks to a price rally by Bitcoin (BTC) and other altcoins.
The SEC’s crackdown on crypto staking services has created a lot of uncertainty in the DeFi space. Cybercriminals used a variety of novel ways to carry out hacks and exploits in 2022, with over $2.8 billion of cryptocurrency stolen. The FSB argued that by trying to replicate some parts of traditional finance, DeFi increases potential vulnerabilities due to the use of novel technologies, the high degree of ecosystem interlinkages and the lack of regulation or compliance.
A potential suspect was identified in the $8.5 million attack on the decentralized finance protocol Platypus. The attacker was able to take out a flash loan from the platform and use the funds to purchase a token from the platform, which was then used to purchase other tokens. The attacker was then able to take out another flash loan, which was used to purchase more tokens, and so on. The attack resulted in the attacker making a total of $8.5 million in profits.
The alleged exploiter of the decentralized finance protocol Mango Markets, Avraham Eisenberg, is seeking to keep his share of crypto gained from his so-called “highly profitable trading strategy.” Eisenberg claims he found a bug in the Mango Markets protocol and used it to make a profit. He is now seeking to keep the funds he earned as a “bug bounty”, arguing that he was not responsible for the losses incurred by Mango Markets.
Analytical data reveals that DeFi’s total market value hit $50 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green with double-digit gains.
This past week has been an eventful one for the DeFi space. The SEC’s crackdown on crypto-staking services has created a lot of uncertainty in the DeFi space, while cybercriminals used a variety of novel ways to carry out hacks and exploits in 2022, with over $2.8 billion of cryptocurrency stolen. The Financial Stability Board (FSB) stated that despite providing many novel services, DeFi does not differ substantially from traditional finance in its functions.
The DeFi market saw a new bullish wave thanks to a price rally by Bitcoin (BTC) and other altcoins. The recent price rally helped the DeFi market regain its $50 billion total value locked. A potential suspect was identified in the $8.5 million attack on the decentralized finance protocol Platypus, while the alleged exploiter of the decentralized finance protocol Mango Markets, Avraham Eisenberg, is seeking to keep his share of crypto gained from his so-called “highly profitable trading strategy.”
The DeFi space has been making waves in the cryptocurrency space for quite some time now and is steadily building its user base. This past week has seen some significant developments in the DeFi space, with the SEC’s crackdown on crypto-staking services leading to uncertain consequences for the DeFi ecosystem. Cybercriminals used various methods to siphon funds through hacks and exploits in 2022, amounting to over $2.8 billion in losses.
The Financial Stability Board (FSB) stated that despite providing many novel services, DeFi does not differ substantially from traditional finance in its functions. The FSB argued that by trying to replicate some parts of traditional finance, DeFi increases potential vulnerabilities due to the use of novel technologies, the high degree of ecosystem interlinkages and the lack of regulation or compliance.
The DeFi market saw a new bullish wave thanks to a price rally by Bitcoin (BTC) and other altcoins. The recent price rally helped the DeFi market regain its $50 billion total value locked. A potential suspect was identified in the $8.5 million attack on the decentralized finance protocol Platypus, while the alleged exploiter of the decentralized finance protocol Mango Markets, Avraham Eisenberg, is seeking to keep his share of crypto gained from his so-called “highly profitable trading strategy.”
The SEC’s crackdown on crypto staking services has created a lot of uncertainty in the DeFi space. Cybercriminals used a variety of novel ways to carry out hacks and exploits in 2022, with over $2.8 billion of cryptocurrency stolen. The FSB argued that by trying to replicate some parts of traditional finance, DeFi increases potential vulnerabilities due to the use of novel technologies, the high degree of ecosystem interlinkages and the lack of regulation or compliance.
Analytical data reveals that DeFi’s total market value hit $50 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green with double-digit gains. This past week has been an eventful one for the DeFi space, with the SEC’s crackdown on crypto-staking services leading to uncertain consequences for the DeFi ecosystem, cybercriminals using various methods to siphon funds through hacks and exploits, and the Financial
