Crypto hacks are a wake-up call for DeFi
Opinion by Orest Gavryliak, Chief Legal Officer, 1inch Labs
Crypto hacks have left the entire industry on high alert. With more than $2.1 billion lost to attacks in the first half of 2025 alone, it's clear that something needs to change. The Bybit breach in February was a wake-up call for DeFi protocols and CEXs alike. The audacious heist made headline news around the world, with North Korean cybercriminals making off with over $1.4 billion.
Crypto hacks are not just a matter of high-profile breaches; they also reveal deeper issues with security and regulation within the industry. Over 80% of crypto stolen in recent hacks was taken through infrastructure exploits, which averaged $10 times more than other attack types. This pattern is clear: hackers are exploiting vulnerabilities in CEXs and DeFi protocols to steal funds. It's time for these platforms to step up their security measures.The problem: Security breaches and lack of regulation
| Security measure | Description |
|---|---|
| Mult-party computation | A method of splitting private keys into multiple shards, making it harder for hackers to access funds. |
| Intelligent co-signers | A system that validates transactions and signatures, rejecting suspicious requests even if all approvals are present. |
| Real-time threat intelligence | A technology that flags high-risk call data in real-time, allowing security teams to take swift action against malicious activity. |
Crypto hacks are not just a problem for individual platforms; they also pose a threat to the entire industry. CEXs and DeFi protocols need to collaborate on risk management and implement robust safeguards to prevent hackers from treating exchanges like their own personal piggy bank. DeFi developers must rally together to create sound governance and security models that keep up with technological advancements.The solution: Collaboration and self-regulation
The ideal: 85% free market, 15% programmable rule layer
The idea is not to replicate traditional finance's bureaucracy but to implement automated, transparent, and minimally invasive standards for things like Anti-Money Laundering, fraud detection, and risk attribution.
These could be community-driven, open-source standards embedded directly into protocols, decentralized applications, and interfaces.
The goal is not to restrict innovation but to future-proof it through shared standards, ethical design, and resilience. Yes, it will take time. Yes, it will take investment. And yes, it will require experimentation and a few false starts. In the long run, the dividends will be enormous.The future: Shared standards and resilience
A call to action
Crypto hacks are not just a problem for DeFi protocols and CEXs; they also pose a threat to consumers and regulators alike.
It's time for the industry to come together and implement robust security measures, collaborate on risk management, and embrace self-regulation.