DeFi and the Dark Side: How Decentralized Finance Works and How It Gets Exploited
Stefan Kitzler, Complexity Science Hub
Abstract
Decentralized Finance (DeFi) promises to reinvent banking without banks, enabling people to lend, borrow, and invest through software programs deployed on distributed blockchain networks like Ethereum, without traditional intermediaries. But this new financial frontier has also become a playground for a new generation of financial crime.
This talk introduces DeFi, what it is and how it works, before turning to a data-driven look at its crime landscape, drawing on over 1,000 recorded criminal events, causing losses exceeding $30 billion. From software vulnerabilities and rug pulls to phishing scams, the talk illustrates how combining computer science and criminology offers a powerful lens for understanding cybercrime.
In the discussion, we will probe DeFi as a contested arena of crypto fraud and ask what its exploits reveal about the politics of code, the reallocation of accountability, and the fragile architectures of trust that underpin decentralized finance. This talk forms part of the LLEA project on Large Language Models in law enforcement analytics, examining DeFi related crime as a sociotechnical configuration to address how AI driven investigative tools not only detect fraud but also reshape knowledge production, responsibility, and governance in law enforcement.
Biography
Stefan Kitzler is currently a PostDoc Researcher at the Complexity Science Hub, where he also completed his PhD in computer science from TU Wien.
His research focuses on cryptoasset data analysis and Decentralized Finance. He lectures at TU Wien, is a Scientist at AIT, and holds a bachelor's and master's in technical physics.
Location
STS Seminar Room / Universitätsstraße 7 (staircase II / 6th floor) 1010 Vienna