The hidden enemy of the crypto world, hacker security incidents are stealing confidence from the industry.

Written by: 1912212.eth, Foresight News

The crypto industry has long been known for various wealth stories, but the crisis hidden beneath this has begun to surface. Recently, bybit's cold wallet was hacked, resulting in a loss of $1.46 billion, becoming the largest single hacking incident in crypto history. Although it did not cause severe negative impacts afterward, it sounded an alarm for industry security. Imagine, the wealth you earned through great effort could be easily stolen by a highly skilled hacker with just a few keystrokes…

Security issues are paramount, and the importance of safeguarding wealth is self-evident. Hacking attacks are no longer just a technical problem; they are one of the greatest risks shaking the very foundation of the entire crypto industry.

As of February 2025, the known losses in the crypto sector for the first quarter have exceeded $1.5 billion, with as many as 20 hacking incidents. The frequency of attacks and the magnitude of losses are staggering. In comparison, data from immunefi speaks volumes. From the beginning of 2024 to August of that year, the entire industry experienced 154 hacking and theft incidents, resulting in total losses of $1.21 billion, while in just two months of 2025, the loss amount has nearly surpassed the record for the same period.

Past Hacking Incidents Are Shocking

In the past history of crypto, some protocols or exchanges have faced enormous challenges due to hacking incidents, even leading to their collapse.

In August 2021, the Poly Network cross-chain protocol was hacked, resulting in a loss of $611 million (multi-chain assets). The hacker exploited a vulnerability in the smart contract to steal assets from Poly Network's Ethereum, BNB chain, and Polygon wallets. Interestingly, the hacker claimed to have done it "just for fun" and eventually returned most of the funds (about $300 million was not recovered). The incident revealed the complexity and potential risks of DeFi protocols.

In February 2022, the Wormhole cross-chain bridge was hacked, resulting in a loss of 120,000 wETH. The hacker exploited a vulnerability in the Solana VAA verification to forge messages and mint wrapped ETH out of thin air. The funds were not recovered, and the incident undermined trust in cross-chain protocols.

In March 2022, the Ronin Network cross-chain bridge was hacked, resulting in a loss of 173,600 ETH and 25.5 million USDC, valued at $620 million. The hacker controlled 5 out of 9 validators on the Ronin Network through a 51% attack, stealing funds from the Axie Infinity game's cross-chain bridge. The FBI confirmed that the Lazarus Group was behind it. The incident exposed the vulnerabilities of cross-chain bridges, and Sky Mavis spent years raising funds to compensate users, highlighting the high cost of repairs.

In October 2022, the Binance cross-chain bridge was hacked, resulting in a loss of 2 million BNB. The hacker exploited a vulnerability in the BSC Token Hub smart contract to forge withdrawal proofs and generate BNB out of thin air. Binance quickly froze most of the assets but still suffered heavy losses. This case prompted the industry to re-examine the security design of cross-chain bridges.

The above are just some of the more severe hacking security incidents in recent years, with countless others resulting in losses of millions or tens of millions.

In recent months, the crypto industry has experienced several serious hacking security incidents.

In February 2025, the stablecoin digital bank Infini lost $49.5 million due to an attack where the hacker secretly retained management privileges.

In February 2025, bybit was hacked, losing over 510,000 native ETH and various derivative ETH, totaling over $1.4 billion. The hacker exploited UI forgery, social engineering, and delegatecall vulnerabilities to breach multi-signature member devices, tampering with the cold wallet smart contract to transfer massive amounts of funds. The attack is suspected to be carried out by the North Korean Lazarus Group.

In November 2024, the Thala Labs DeFi platform was hacked, resulting in a loss of $25.5 million, which was later fully recovered through collaboration with white hat hackers and the community. The incident highlighted the potential of DeFi protocols in emergency response while exposing the vulnerabilities in private key management.

In November 2024, the on-chain trading platform Dexx was hacked, resulting in a loss of 21 million USDT (over $150 million). The attack involved over 1,000 users and more than 8,000 addresses, suspected to be due to plaintext storage and transmission of the platform's private keys, with internal collusion not ruled out. The founder promised compensation, and victims have filed cases in multiple locations, but the attackers' assets have not been fully transferred.

Why Are Hackers So Rampant?

The rampant hacking in the crypto industry primarily stems from the interplay of multiple factors, including technology, human nature, economics, and regulation. From a technical perspective, the irreversibility of blockchain transactions makes it difficult to recover stolen funds, while the complexity of smart contracts harbors hidden vulnerabilities, such as the delegatecall issue in the bybit incident, which provided hackers with an opportunity. Additionally, human weaknesses are also a significant reason; social engineering attacks often succeed, such as multi-signature members being phished or employees lacking security awareness, rendering the protective system ineffective.

From an economic standpoint, the high liquidity and anonymity of crypto assets provide hackers with opportunities for money laundering, and the prospect of huge returns attracts professional groups like the Lazarus Group. The low-risk, high-reward nature creates a severe imbalance between attack costs and returns. Finally, the lack of regulation further amplifies the problem; while the decentralized nature grants freedom to the industry, it also lacks unified security standards and enforcement mechanisms, making it difficult to effectively curb hacker activities. These factors combined make the crypto industry a paradise for hackers, challenging not only technical security but also threatening user trust and ecological development, necessitating a collective response from the entire industry.

How Hackers Threaten the Foundation of the Industry

Hackers pose a threat to the crypto industry that penetrates its very foundation, undermining trust, market stability, and development prospects. Firstly, they directly erode user trust; large-scale theft not only causes retail investors to panic and withdraw their investments but also makes institutional investors doubt the security of crypto, leading to a trust crisis that could trigger a "bank run" effect, resulting in liquidity depletion or even collapse of platforms. Secondly, hacker attacks cause severe market fluctuations; for example, after the $570 million theft from the Binance cross-chain bridge, the price of BNB plummeted temporarily, causing panic selling that affected the entire ecosystem, with the chain reaction in DeFi and exchanges amplifying losses and further weakening market confidence.

Moreover, industry development is also hindered; massive theft cases deter potential investors, slowing the inflow of institutional funds, while developers may reduce innovative attempts due to security pressures, as cross-chain bridges and smart contract projects face stricter scrutiny following the Ronin and Wormhole incidents.

On a deeper level, hackers expose the technical and governance shortcomings of the industry. While the irreversibility and decentralization of blockchain are advantages, they become double-edged swords in the face of security. If these root problems are not addressed, the long-term reputation and mainstream adoption of the crypto industry will be limited. Hackers are not only fund plunderers but also destroyers of the industry ecosystem; their threat has transcended individual incidents, becoming a systemic risk.

How to Fight Back?

In the face of the severe threat posed by hackers, the crypto industry can fight back through a multi-faceted approach involving technological upgrades, enhanced education, collaborative mechanisms, and insurance systems. Firstly, the technological aspect is the core defense line; the industry needs to strengthen code audits of smart contracts, promote formal verification tools, ensure vulnerabilities are fixed before going live, and improve multi-signature mechanisms and cold wallet designs to reduce single points of failure. Secondly, enhancing education is crucial; users and practitioners need to undergo systematic security training to recognize social engineering scams, reducing the success rate of phishing attacks, and platforms should also promote best practices for private key management.

Additionally, industry collaboration can significantly enhance the efficiency of counterattacks. Establishing a real-time threat intelligence sharing network allows exchanges, DeFi projects, and security companies to jointly track hacker fund flows, as demonstrated by the Thala Labs case where $25.5 million was recovered through community collaboration; appropriately introducing regulation can also encourage platforms to implement security responsibilities, creating a deterrent effect.

Finally, promoting crypto asset insurance mechanisms can provide users with a buffer, mitigating the impact of losses. The approach taken in the KuCoin incident, where insurance compensated for part of the funds, is worth emulating. If these measures can be advanced in coordination, they can not only curb the rampant trend of hackers but also turn crises into opportunities, promoting technological maturity and rebuilding trust in the industry, allowing the crypto ecosystem to progress steadily amid challenges.

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