Crypto, Blockchain and DeFi Security

Crypto, Blockchain and DeFi Security Articles

Cryptosec Maps Dark Web SIM Swapping Economy

SIM Swapping
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 engineering, insider threat, or phishing techniques.” Threat actors execute their SIM swap attacks via social-engineering ruses, where they impersonate authorized mobile-carrier account holders and dupe customer service representatives into “switching the victim's mobile number to a SIM card in the criminal's possession,” according to the...

Verified Crypto Account Listings Proliferate on the Dark Web

Dark Web Crypto Account Listings
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, Germany’s N26 mobile banking platform claims the most expensive ones. This price increase has occurred despite a generally bearish market environment for crypto assets. Fueled by Western financial sanctions issued in retaliation for Russia’s invasion of Ukraine, listings for verified crypto accounts have also experienced...

A Deep Dive Into the ‘Rags to Riches’ Manual for Withdrawing Illicit-Origin Crypto

Crypto Illicit Money Laundering
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 enable large groups of users to pool their funds together in a deposit wallet that is programmed to redistribute tumbled crypto assets back to designated receivers. Specifically, mixer protocols scramble large clusters of crypto deposit inputs and transfer outputs together, making it difficult for blockchain sleuths...

How Blockchain Security Differs From Traditional Cybersecurity – 4 – Security Operations (SOC)

Blockchain Crypto SOC
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 new ways of detecting security-related events. The effectiveness of a SOC that is focused on detecting and responding to blockchain, crypto, and DeFi threats might be significantly improved if it took a "fusion" approach that combines various fraud detection methods with the most effective cybersecurity methods,...

How Blockchain Security Differs From Traditional Cybersecurity – 3 – User Security

Blockchain User Security
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 their users. IT vs. Blockchain Security for Users Traditional IT and the blockchain operate under very different philosophies.  Many traditional IT systems are centralized and try to control every aspect of the user experience.  In contrast, the ethos of blockchain technology focuses on decentralization and self-custody. These different...

How Blockchain Security Differs From Traditional Cybersecurity – 2 – Smart Contract Developers

Smart Contract Security Differences
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 to deploy code on top of the blockchain has been one of the main drivers of blockchain’s widespread adoption and success. Traditional Development vs. Smart Contract Development Traditional applications and smart contracts can implement much of the same functionality.  Smart contract platforms are Turing complete, and, on...

Proof of Reserve vs. Proof of Liability vs. Proof of Solvency

Proof of Solvency
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 useful to understand Merkle trees first. A Merkle tree is designed to securely summarize a set of data.  This means that, given the root value of the tree and some internal node values, it is possible to prove that a particular piece of data is included...

Most popular articles this week