LONDON : For most of the 13-year life of cryptocurrencies, exchanges were the epicentre for cyberheists. Now, a bigger hacking risk in the growing sector has exploded into view: peer-to-peer crypto platforms.
DeFi sites allow users to lend, borrow and save - usually in cryptocurrencies - while bypassing the traditional gatekeepers of finance such as banks and exchanges. Backers say the technology offers cheaper and more efficient access to financial services. Centralised exchanges, which act as middlemen between buyers and sellers of crypto, had previously been the main targets of crypto cyberheists.
"What's happened is the big exchanges have got really good and the smaller exchanges aren't around anymore," he said."The frontier is definitely DeFi now." Proponents says the use of open-source code means vulnerabilities can be quickly identified and solved by users, reducing the risk of crime. DeFi can police itself, they say.
The SEC this month brought its first enforcement action https://www.sec.gov/news/press-release/2021-145 involving DeFi tech, alleging the company issued unregistered securities and misled investors. The SEC did not respond to further questions on its stance.Commissioner Dan Berkovitz in June called DeFi a"Hobbesian marketplace" https://www.cftc.