The SEC’s crackdown has one uncertain consequence for DeFi: redefining finance

Welcome to Finance Redefined, your weekly dose of basic decentralized finance (DeFi) insights – a newsletter set to bring you important developments over the past week.

The US Securities and Exchange Commission (SEC) crackdown on cryptocurrency storage services could have uncertain consequences for the DeFi ecosystem.

Cybercriminals used various methods to steal money through hacks and exploits in 2022, with losses amounting to more than $2.8 billion. The second week of February saw the Platypus protocol exploited, resulting in losses of $8.5 million. In another update related to the exploit, the hacker behind Mango Markets wants to keep the disputed funds paid out as a bounty for the error.

The Financial Stability Board (FSB) stated that despite the introduction of many new services, DeFi does not differ significantly from traditional finance in its functions,

The DeFi market has seen a fresh bullish wave thanks to the price rally by Bitcoin (BTC) and other altcoins. The recent price hike has helped the DeFi market regain its total value of $50 billion.

SEC crackdown on crypto risk has uncertain consequences for DeFi: Lido Finance

According to the head of business development at Lido DAO, the US securities regulator’s crackdown on cryptocurrency betting could have unintended consequences for decentralized finance.

Jacob Plesch told Bloomberg in February. 13 reported that the biggest risk would be if the SEC eventually concludes that no US citizen can interact with cryptocurrency storage services, including protocols.

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DeFi Exploit and Access Control Hack Costing Crypto Investors Billions in 2022: Report

Cybercriminals used a variety of new methods to carry out hacks and exploits in 2022, with more than $2.8 billion in cryptocurrency stolen.

According to a report by CoinGecko, which used data from DeFiYield’s REKT database, hackers used various methods to steal cryptocurrency in 2022. These methods include bypassing verifications, market manipulation, “crowd plundering”, smart contracts, and bridging exploits.

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A BIS funded regulator to verify DeFi entry points such as stablecoins

The Financial Stability Board – the financial regulator funded by the Bank for International Settlements – pushes international regulations for decentralized finance.

in feb. On September 16, the FSB released a report on DeFi financial stability risks, highlighting key vulnerabilities, transmission channels, and the evolution of DeFi. Despite offering many “new” services, DeFi is “not fundamentally different” from traditional finance (TradFi) in its functions, the authority said in the report. The FSB argued that by attempting to replicate some parts of TradFi, DeFi increases potential vulnerabilities due to the use of new technologies, the high degree of interdependence in the ecosystem, and the lack of regulation or compliance.

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Platypus DeFi protocol suffers $8.5 million flash loan attack, suspect identified

A possible suspect has been identified in an $8.5 million attack on decentralized finance protocol Platypus.

Blockchain security firm CertiK first reported the flash loan attack on the Avalanche-based stablecoin exchange platform through a tweet on February 16, along with the attacker’s alleged contract address.

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Mango Markets scalper seeks to keep disputed funds paid out as ‘bug bounty’

The alleged exploiter of the Mango Markets decentralized finance protocol, Avraham Eisenberg, is seeking to preserve his share of the cryptocurrency earned from a so-called “highly profitable trading strategy.”

in feb. On September 15, attorneys for Eisenberg filed a motion in New York County Court disputing a lawsuit from Mango seeking $47 million in damages plus interest beginning at the time of Eisenberg’s attack in October 2022, which drained about $117 million from Protocol.

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DeFi Market Overview

Analytical data reveals that the total market capitalization of DeFi reached $50 billion last week. Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi tokens by market cap had a bullish week, with most of the tokens trading in the green with double-digit gains.

Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us next Friday for more stories, ideas, and education in this dynamically evolving space.