Tag: Blockchain | Page 4

$570 Million Hack on Binance Blockchain Exposes Serious Flaws in Cryptocurrency Systems

October 8, 2022/in Computer Security

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On Friday, Binance, the largest cryptocurrency exchange in the world, announced that $570 million had been stolen in a breach of the blockchain it operates to facilitate cross-network transfers of assets. The Binance Smart Chain network attack exposed vulnerability in DeFi, or computer-controlled financial transactions.

System Vulnerable but No Money Lost

In an interview with CNBC, Binance CEO Changpeng Zhao acknowledged that bug-free software is impossible to achieve. The hacker stressed that no users had lost any money, but warned that cross-chain bridges were especially susceptible to attacks and that the industry needs to improve its ability to learn from its mistakes.

A series of assaults have been discovered targeting weaknesses in cross-chain bridges, and the team will freely discuss the specifics of the postmortem and any lessons on how to deploy more sophisticated security measures to shore-up these vulnerabilities, Binance Smart Chain said in an apology blog post.

String of Hacks Cost Market Billions In 2022

The blockchain analysis firm Chainalysis predicted in August that $2 billion worth of cryptocurrencies will be stolen in 13 cross-chain bridge attacks, most of which would occur in 2022. Axie Infinity, a computer game fueled by cryptocurrency, suffered a $600 million hack in March. The amount of $325,000,000 was taken from the Wormhole system in February.

These vulnerabilities illustrate how dependent DeFi platforms are on code for management and how, in times of crisis, decentralization may slow down efforts to fix problems. A group of users called validators manage the Binance chain ecosystem by holding tokens and voting on proposed code modifications.

Binance Smart Chain issued a statement explaining how it was able to prevent the situation from spreading by contacting community validators one by one. The closure is postponed, although the damage was kept to a minimum.

Final Decision in the Hands of Binance Smart Chain Community Members

It will now be up to the Binance Smart Chain community to decide on what to do next, which may include freezing the stolen cash and giving a bounty of up…

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ECS Research Team Receives Grant to Advance the Ethereum Blockchain Ecosystem

September 6, 2022/in Computer Security

STEM

Yuzhe Tang headshot Yuzhe Tang, assistant professor of electrical engineering and computer science in the College of Engineering and Computer Science (ECS) and his research team received a grant from the non-profit Ethereum Foundation for research to advance the Ethereum blockchain ecosystem.

The grant is part of the peer-to-peer (P2P) network grants from the Ethereum Foundation’s recent Academic Grants Round.

A blockchain network is an open-membership peer-to-peer network that stores the information of crypto-asset ownership. Thus, the security and availability of the blockchain network are essential to maintaining asset safety. For instance, if the blockchain network is down, crypto-asset owners cannot withdraw their assets and traders cannot trade.

Tang’s proposed research aims to secure Ethereum’s P2P network against existing and emerging attacks. Ethereum is the second largest blockchain after Bitcoin and holds assets worth more than $190 billion as of August 2022. His research will involve systematic vulnerability discovery, online attack detection and mitigation tailored to leading Ethereum client software.

Tang’s research will result in automatic software tools and retrofittable mitigation subsystems. In addition, he and his team are interested in collaborating with the Ethereum developer community to integrate the software artifacts for Ethereum clients.

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Over $2 Billion Stolen This Year In Blockchain Bridge Hacks Expose DeFi’s Achilles Heel

August 19, 2022/in Internet Security

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If 2018 was the Year of the Hack for centralized crypto exchanges, decentralized blockchain bridges seem destined to win that honor this year.

Over $1.9 billion was stolen in cross-chain hacks in the first half of 2022, according to a new blog post by crypto analytic firm Chainalysis.

Cross-chain bridges have come under fire in recent weeks for their vulnerability. At their core, bridges allow users to exchange one token for another, say BNBBNB
(Binance’s token) for ethereum; they are the key to expanding operability across blockchains.

“Having that interoperability is crucial,” says Kim Grauer, head of research at Chainalysis.

But in order to function, bridges must hold large amounts of both tokens. Such liquidity pools make them enticing to hackers. Bridges “allow for blockchains to talk,” says Grauer. “But we’ve also created these honey pots for malicious actors.”

“Regardless of how those funds are stored–locked up in a smart contract or with a centralized custodian–that storage point becomes a target,” she adds.

Their vulnerability may also be a result of DeFi growing too much, too fast. Cross-chain bridges, says Amit Dar, senior director of strategy at cybersecurity firm Active Fence, are “kind of afterthoughts.”

“Effective bridge design is still an unresolved technical challenge, with many new models being developed and tested,” adds Grauer.

Still, the bridges have become staples of decentralized finance, and as long as they remain vulnerable, hacks will also be commonplace.

“The promise of DeFi was that we could have trustless finance,” says Sam William, CEO of ArweaveAR
, a blockchain start-up behind the permaweb which aims to preserve Internet content. “But instead people have ended up trusting the marketing and subsequently trusting the code without verifying it.”

As DeFi grows, this “painful lesson,” as Grauer puts it, is costing users unprecedented amounts of money. Thefts in the first half of this year were up 58% from the corresponding 2021 period. “This trend doesn’t appear set to reverse anytime soon,”…

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