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Blockchain is under threat from cyber criminals, study finds

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Researchers have found cyber threats are bringing blockchain security into doubt on critical infrastructure

Miners who use computations to validate transactions through blockchain technology could be at risk, according to joint-research from Australia and Iran.

A study by Charles Darwin University (CDU) and the University of Tehran found cyber criminals are deceiving miners, who use the blockchain to power cryptocurrencies.

Miners who are given cryptocurrency as payment could be under attack by criminals who want to steal some of their computational power.

Professor Mamoun Alazab said this new attack method on blockchain was concerning because its high rates of success, particularly when the blockchain technology is used in critical infrastructure.

“The misleading attack is orchestrated by someone who redirects some miners computational power to a different chain, so that it (the attacker) can outrun the main chain and thus make its fork the dominant one,” he said.

Miners typically receive compensation for using their computational power to verify transactions on a specific blockchain.

“The chain, that miners are being misdirected to, is engineered to lose in the competition, and so is the main chain. All is for the attacker’s chain to win and become dominant.

“This vulnerability can also boost the success of other types of blockchain attacks,” Professor Alazab explained.

How does this affect cryptocurrencies?

Bitcoin, like other cryptocurrencies are not safe from any attacks, according to Professor Alazab.

“But this new misleading attack, along with some high-profile attacks that have cost millions of dollars, has shown that blockchain technology, particularly Bitcoin, is not as secure as we think, or as it needs to be for use in critical infrastructure.”

The study found Bitcoin’s blockchain technology was vulnerable, but misleading attacks are not possible on Ethereum’s blockchain technology because of its tracking system.

Dr Ghader Ebrahimpour and Dr Mohammad Sayad Haghighi were also involved in the research from the University of Tehran.

“If preventive or compensative measures are not taken, this attack can undermine the trust to a blockchain security and lower its value,” Dr Ebrahimpour said.

Blockchain miners have been warned about the impacts of their work if it is used in financial systems or critical infrastructure.

Professor Alazab said there may be different solutions to the threat.

“One is to change the design and remove the block reward. The miners then have to be rewarded out of transactions commissions.

“The concept of uncle block reward, similar to that of Ethereum, can also help in mitigating the problem,” he said.

Costa is a news producer at ticker NEWS. He has previously worked as a regional journalist at the Southern Highlands Express newspaper. He also has several years' experience in the fire and emergency services sector, where he has worked with researchers, policymakers and local communities. He has also worked at the Seven Network during their Olympic Games coverage and in the ABC Melbourne newsroom. He also holds a Bachelor of Arts (Professional), with expertise in journalism, politics and international relations. His other interests include colonial legacies in the Pacific, counter-terrorism, aviation and travel.

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Crypto heists in 2022 totalled $3.8 billion

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Last year was the worst on record for cryptocurrency heists, with hackers stealing as much as $3.8 billion, led by attackers linked to North Korea

A Chainalysis report found hacking activity that “ebbed and flowed” throughout the year, with “huge spikes” in March and October.

October was the biggest single month ever for cryptocurrency hacking, with $775.7 million stolen in 32 separate attacks.

North Korea-linked hackers such as those in the cybercriminal syndicate Lazarus Group have been by far the most prolific cryptocurrency hackers, stealing an estimated $1.7 billion worth of in multiple attacks last year.

North Korea has denied allegations of hacking or other cyberattacks.

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Crypto

Sam Bankman-Fried banned from communication with FTX

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A U.S. judge has banned former FTX founder Sam Bankman-Fried from contacting current and former employees

Federal prosecutors asked for this ruling, as they believe Bankman-Fried may tamper with witnesses or destroy evidence in his criminal fraud case.

It was revealed the 30-year-old tried to send a message to someone known as ‘Witness 1″ a few weeks ago, proposing to have a constructive conversation with them.

Bankman-Fried was arrested in December on charges of looting billions of dollars of FTX customer funds, and lying to investors and lenders.

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Crypto

Celsius Network propped up token with investor money

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It’s been revealed crypto lender Celsius used investor money and customer deposits to prop up its own token and inflate its balance sheet

 
Celsius gathered crypto deposits from retail customers and invested them in the wholesale crypto market.

It raised some of the initial capital to fund its business by creating and then selling its own crypto token.

Celsius filed for bankruptcy in July last year, after freezing customer withdrawals from its platform.

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