Today bankrupt crypto hedge fund three Arrows Capital demands more than a Billion dollars from terraform Labs Coinbase urges the SEC to redo a rules Change that would bring defi under the Agency's jurisdiction and we take a deep Dive into halborn new report on the top 100 defi hacks which reveals more than $7 billion in total losses between 2016 And 2023 welcome to cnbc's crypto world I'm T heal crypto markets were in the red This morning as Bitcoin continued to Oscillate around the $60,000 level by Noon Eastern Bitcoin was lower by 1.2% At about $59,400 but climbed to around $61,000 about an hour later as the Producer price index the first of two Key inflation reports expected this week Came in cooler than expected also as of Noon ether inched lower by more than 1% But still traded above $2,600 and salana slipped 1% to $146 however an hour later ether Rose to The $2,700 level and salana jumped to $149 okay let's talk about the top Stories collapsed crypto hedge fund 3 Arrows capital is making a billion doll Claim against terraform labs in a filing In Delaware Bankruptcy Court the Liquidators For 3ac claimed that the Creator behind Tera USD and Luna quote Engaged in a scheme to manipulate the Open market for Luna and us which
Inflated the price and induced three Arrows to buy the assets the Liquidators Also claim that the collapse of 3ac is Directly attributable to the fraud Perpetrated by terraform Labs just a Quick reminder that in June terraform Labs and its co-founder joquan agreed to Pay $4.5 billion dollar to the SEC after A jury found the organization liable for Fraud now all told three Arrow's Liquidators are seeking more than $1.3 Billion from terraform Labs next Coinbase is calling on the SEC to Rethink a rule that brings defi into the Agency's regulatory purview in March the SEC adopted a revision to the Securities Exchange Act of 1934 in that update the Definition of an exchange was expanded To include more kinds of assets and Institutions decentralized Finance being One of them amid growing outcry to that Rule the SEC reopened its comment period On the proposal and in a letter to the Agency submitted on Monday coinbase said It's concerned about the expanded Definition of exchange the crypto Company said the SEC irrationally Assumes that compliance is possible for Decentralized exchanges and said that The agency needs to Repose the rule and Decline to extend the guidelines to Decentralized exchanges also known as Dexes in a statement shared with us an SEC spokesperson said the Agency quote
Benefits from robust engagement from the Public and will review all comments Submitted during the open comment period The SEC added it generally responds to Comments received as part of the final Rule making and not beforehand and Finally speaking of the SEC the agency Just filed fraud charges against an Alleged crypto marketing scheme in a Monday press release the SEC alleged That novatech and its principles Operated as a multi-level marketing Scheme to defraud more than 200,000 Investors around the world the SEC Claims novatech was able to Rak in more Than $650 Million by promising to invest The funds in crypto and foreign markets At the same time the SEC filed charges Against top promoters of the platform Claiming they were paid large sums of Money to promote Nova Tech and continued To do so even after Regulators made them Aware of multiple red flags one of those Promoters Martin zezy agreed to settle The sec's charges by paying a $100,000 Civil penalty pending court Approval all right for our main story Yesterday Halburn released its report on The top 100 defi hacks between 2016 and 2023 which reveals more than7 billion in Total losses in that time frame crypto World Talia Kaplan spoke with the Report's author Mara menz and Hal bur's VP of Enterprise security P chelas about
The report's key findings and the trends That were Uncovered I went through your new report On the top D5 hacks and I want to point Out some of the key findings in the Six-year time span between 2016 and 2023 A total of$ 7.35 billion was lost to These hacks with the $624 million Exploit of the Ronin Network back in 2022 accounting for the largest hack in That time frame some of the common Exploits you found PS include direct Contract exploitation which accounted For 33% of hacks followed by both Compromised private keys and price Manipulation at 27% Mar you're the Author of this report so I want to start Off by asking you what jumped out at you While you were putting this data Together what would you say was the main Takeaway of your Research I think the main takeaway is That um even though we have it seems Like we have improved uh Security in Regard with uh auditing a smart CRA There is still a huge percentage of Hacks that are on not audited protocol And that we need to do like a holistic And and complete audit of the protocol Taking into account those ofin vectors Like a compromise private key and other Kind of of Attacks now another interesting note From your report the number of a tax
Peaked in 2021 with 38% of the top 100 Hacks taking place that year the trend Showed a slight drop in the number of Attacks within the next two years but The numbers were still significant and a Lot higher than the years 2016 through 20120 the amount of money lost per year Was also a lot higher in the year 2021 Through 2023 with losses peaking in 2022 Which your report says highlights the Increasing scale of Defi and the high Stakes involv evolved Peter what do you Attribute the growing trend of defi Hax To and why do you think we saw a drop in Both the number of attacks and the Amount of money lost last Year um so I think there are you know Multiple facets to this um we've uh seen An explosive growth of uh defi um as a You know new paradigm in both finance And Technology uh you know since 2020 You know throughout 2021 2022 um which also coincided with uh you Know very high profile um uh you know um Collapses of both decentralized and Centralized companies which you know Naturally brought down the value of uh You know of cryptocurrencies uh in General and so you know while um the the Numbers they may u you know show lower Values still um the number of hacks and The structure of them that still um Remains quite concerning and so this is Both uh economic reasons for the drop in
Value but uh for the increased activity That's uh increased adoption and Popularity of uh defi uh within Blockchain and power users I also wanted To add uh that uh even though we are we Saw a Tren on of a lower number of Attack and AOW value lost on 2023 it could also be related to the Fact that there was kind of a crypto Crypto winter last year and so far in The eight months we have this year if we Check for example the top 10 uh Leaderboard hats we already have four That are um no three that are from 2024 And are higher in in value loss than 202 23 it also coincides that the total Value lock on the Fe protocol have been Increasing although is still not at the Level of 2022 so we might see an increase on on Number of HS and value lost this year we Don't know it's difficult to predict now I want to turn to the most targeted Chains your research found that etherium Led in both the number of attacks and Total value lost accounting for nearly 50% followed by binance smart chain with 16% and polygon with nearly 8% P why do You think etherium was the most targeted Is it because most decentralized Applications are built on the specific Chain um that's largely true yes um Often times um the um ethereum and you Know it's uh extended ecosystem is the
First step in you know most people's um Defi and um you know smart contract and Cryptocurrency journey um and uh you Know bance smart chain and polygon they Share some similarities you know to some You know a large extent with ethereum And so uh you know they are considered a Part of the ethereum ecosystem and so uh It's quite easy to Port a concept a Project and attack Vector too from uh One ecosystem to another just Because how similar they are now the Report notes that D5 protocols face Diverse vulnerabilities with input Validation flaws and logic errors being The most common the report also points Out that while proof verification errors Are less common they also lead to Significant losses now the report also Offers some ways these risks can be Mitigated to protect against substantial Financial damage those include auditing And validation processes so Peter can You take us through some of the ways the Risk of hacks can be Reduced the first and foremost thing we Should remember is that security is not A product it's a process and you know More poetically it's a journey um so um You are set off as early as you can on That Journey um while you start Conceptualizing your product your Service um you know just how close um You are uh to to the actual user funds
Or your treas or the treasury of your Organization um you need to involve Security in every step of your uh you Know uh product or service life cycle um And so uh if you are solution for some Of the threats attacks um you know Before they uh obviously before they Happen um or you know before someone Points them out to you I you know either An internal or external security Services provider um you'll be better Prepared um for um you know your uh you Know beta launch for your mayet launch Um and for you know obviously increased User base because like when you grow too Big often times it's unfortunately too Late to uh you know fix some Foundational issues you'll be able to Check out more of that interview on Hell Bur's report over at cnbc.com Cryptoworld that's all for Cryptor today We'll be back again tomorrow and we'll See you then done [Music]
