Hardening cyber defenses will be required to combat crypto attacks, according to Ari Redbord, head of legal and government affairs at crypto detective firm TRM Labs, on CoinDesk TV’s “First Mover” on Thursday.
According to Redbord, a former prosecutor for the Department of Justice, building better “blockchain intelligence tools” that can uncover new mixers before bad actors can get to them would be key to identifying and tracing criminal activities.
“The bad guys are getting better, and their strategies are becoming more sophisticated,” said Redbord. “However, the tools, regulations, investigators, and law enforcement are growing more sophisticated.”
TRM Labs estimates that more than $3.6 billion in funds had been siphoned in crypto this year. Approximately 80%, or $3 billion, was earmarked for decentralized financing (DeFi).
He attributes this to the fact that many DeFi platforms are new and have yet to establish solid cybersecurity solutions, as well as the networks’ high liquidity.
During the same “First Mover” episode, Erin Plante, vice president of investigations at Chainalysis, another crypto detective firm, stated that many attacks are taking place on bridges that are used to transfer funds between different platforms.
Chainalysis discovered that “sophistication in money laundering” is getting more difficult to decipher as bad actors seek to cash out on centralized exchanges that are likely to be unaware that the funds are stolen due to the bad actors’ usage of several mixers to conceal the source of the funds.
Crypto mixers, which function similarly to black boxes, allow users to send and receive bitcoin (BTC) secretly.
“There is a genuine need to keep evolving the intelligence and technologies to be able to identify the new mixes that are cropping up in those places,” Plante added.