The crypto industry wants to upend the giants of finance. And they have a word for their revolution: “DeFi.”
After a litany of crises and scandals in traditional finance, legions of computer programmers decided to throw their hat into the ring, creating new infrastructure that took banks and other institutions out of the equation. Anyone with a computer and an internet connection could launch their own software for things like lending, trading or insurance.
But that lower barrier to entry opened the space to bad actors who wanted to swindle people out of their money. The industry’s rapid pace of development also led to bugs and programming gaffes, making it an easy target for cyber-savvy criminals. In 2021, more than $12 billion was lost to thieves and scammers exploiting DeFi protocols.
Now, after a plunge in crypto prices, and the demise of multibillion-dollar projects like Terra, regulators and law enforcement are paying more attention, zeroing in on the hackers and grifters making operating in the nascent industry.
Watch the video to learn more about DeFi, how it works, and what’s next for the industry as regulators seek to clean it up.
