SEC Commissioner Advocates Decentralization amid Ethereum Hacks and DeFi Milestone of $95 Billion
Summary:
This week, in the world of decentralized finance (DeFi), Hester Pierce, Commissioner of the U.S Securities and Exchange Commission (SEC), emphasized the need for greater decentralization. Ethereum has been the biggest target of cybercriminals in 2024, accounting for 85% of total value lost. The value locked in DeFi protocols has broken past $95 billion. There have been significant crypto hacks, including billions of Shido (SHIDO) tokens stolen from the Shido blockchain, and a Seneca stablecoin hack worth roughly $6.4 million. The latter was largely returned following a bounty offer by Seneca. Lastly, Shido’s token faced a crash of 94% as its Ethereum staking contract was drained.
Introducing Finance Redefined - your weekly brief on crucial developments in the field of decentralized finance (DeFi). This summary is constructed to keep you in the loop with the key events from the past seven days. In a recent informal discussion at ETHDenver, Hester Pierce, Commissioner of the U.S Securities and Exchange Commission (SEC), voiced her support for increased decentralization and warned that centralization results in the accumulation of risks. PeckShield reported a scenario where a nefarious actor hijacked Shido blockchain’s Ethereum staking contract and stole billions of its Shido (SHIDO) tokens. As per a recent report from Immunefi, Ethereum was the primary target of online intruders in 2024, responsible for 85% of total value lost in February. The leading 100 DeFi tokens maintained their upward direction and the accumulated value secured in DeFi protocols crossed the $95 billion mark.
SEC’s Commissioner Hester Pierce calls for further decentralization. Well-known as the "Crypto Mom", Pierce, the SEC Commissioner, concluded her informal discussion with CNBC’s MacKenzie Sigalos at ETHDenver conference on Feb. 29, highlighting the merits of decentralization for the U.S. financial system. In her view, a more relaxed stance towards crypto regulation and application would serve the system well.
Losses in digital assets due to hacking in 2024 saw an uptick of 15.4% compared to the same period the previous year. As per a Feb. 29 report from blockchain security firm Immunefi, this year has seen more than $200 million of cryptocurrency swindled via hacks and rug pulls across 32 separate incidents. These losses represent a 15.4% increase as compared to the same first two months of 2023, wherein a total of $173 million worth of digital assets were stolen.
After an exploitation resulting in the theft of $6.4 million, the hacker behind the Seneca stablecoin returns pilfered funds. The theft occurred following a vulnerability in the approval mechanism of the protocol’s intelligent contract. Seneca opted to offer the culprit a reward of 20% to return the stolen digital assets. Reports of the ransomware attack surfaced on several blockchain security forums on Feb. 28, and organizations such as CertiK urged users of the Ethereum and Arbitrum networks to rescind approvals on a specific address. The losses were initially speculated to be around $3 million, but later it was discovered that the culprit had made away with over 1,900 Ether (ETH), valued at $6.4 million. Eventually, the hacker conceded and ended up returning around 1,537 ETH, approximately $5.3 million, to the prescribed wallet address by Seneca.
Shido’s token faces a crushing 94% plunge as intruder drains its Ethereum staking contract. The Shido token, associated with the layer-1 blockchain, suffered a 94% devaluation in half an hour after its Ethereum-based staking contract fell prey to a security breach. Blockchain security company PeckShield reported this dramatic fall in value in a post on Feb. 29. It was later revealed that the infiltrator shifted the blockchain’s Ethereum staking agreement to a new owner, subsequently modifying the agreement with a concealed function that enabled the withdrawal of staked tokens.
To wrap it up, according to data from Cointelegraph Markets Pro and TradingView, the top 100 DeFi tokens by market capitalization enjoyed a successful trading week. Most of these tokens reported a positive trajectory on their weekly charts. The total value locked (TVL) in DeFi protocols surpassed $95 billion, marking the first such instance in over a year. Thanks for joining us in this roundup of the latest key updates from the DeFi sector. Look forward to the next round of informative stories, insights, and more about this fast-evolving segment next Friday.
Published At
3/1/2024 10:25:00 PM
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