Fraudsters are thriving as the crypto industry continues to gain momentum. Having come into existence as an alternative to traditional finance, an option that is safe and decentralized, that can bring transparency and resilience, 16 years later, the system raises its ability to hold into that realization. 2025 has continued to crush that dream, costing the industry more than 2.3 billion USD of losses. Hacking has become a pattern of politically motivated hacks, private key thefts, and protocol vulnerabilities that continue to plague the crypto industry. And while the attacks are becoming more sophisticated, experts say many of the vulnerabilities are preventable.
A Year of Staggering Losses
February 2025 saw Bybit, a Dubai-based exchange, loose $1.46 billion in what may be the largest crypto theft ever. Investigators suspect North Korea’s Lazarus Group used malicious software to trick the platform into approving unauthorized transfers. In May, Coinbase, a major U.S. exchange, was scammed out of $400 million when attackers bribed overseas support staff to access user accounts. Cetus, a decentralized finance (DeFi) platform on the Sui blockchain, also lost $220 million to fake token scams, while Iran’s Nobitex exchange saw $90 million stolen in a politically motivated attack.
These heists have cost the industry more than $2.3 billion in the first half of 2025, according to blockchain analytics firm Chainalysis. That puts this year on track to surpass 2024’s total losses of $2.85 billion. The surge in scams is raising tough questions about whether crypto’s rapid growth is leaving it vulnerable to increasingly clever criminals.
Why Scams Are Thriving?
Crypto’s open, decentralized design, which allows users to trade and lend without banks, is both its strength and its weakness. DeFi platforms, powered by self-executing smart contracts, are especially at risk. In July, GMX, a trading platform, lost $40 million because hackers exploited outdated code that should have been retired. In January, AdsPower users lost $4.7 million after downloading a fake browser plugin that stole their wallet keys. Even trusted exchanges like Phemex were hit, losing $85 million in January due to a flaw in its online wallet system.
“Hackers are exploiting the industry’s rush to innovate,” said William Brangham, a cybersecurity analyst, in an interview with PBS. “New platforms launch with untested code, and users often skip basic precautions, creating easy targets.”
The Chainalysis 2025 Crypto Crime Report highlights how criminals are adapting, using artificial intelligence to personalize scams and exploit unknown software flaws, known as zero-day vulnerabilities. On the other hand, stablecoins like the U.S. dollar, are now a go-to tool for laundering stolen funds, making them harder to trace.
Political Motives and National Threats
The involvement of nation-state actors has also added a new dimension to crypto crime. North Korea’s Lazarus Group has reportedly stolen more than six billion dollars in digital assets since 2017. Experts believe these funds are used to support the country’s missile programs.
The Nobitex hack in June was also linked to a group calling itself Predatory Sparrow. The group claimed the breach was retaliation against the Iranian regime and sent some stolen assets to burn addresses carrying political messages.
Regulatory Challenges and Security Gaps
Despite increasing scrutiny, cryptocurrency platforms remain lightly regulated in many jurisdictions. Security practices vary widely. Some platforms perform regular audits and use cold storage, while others rely on minimal safeguards.
“Crypto is still like the Wild West,” said one cybersecurity expert. “There are good actors trying to build strong systems, but many are still prioritizing profits over protection.”
Meanwhile, calls for better risk management and compliance protocols are growing louder. Industry groups are urging exchanges to phase out older contracts and introduce multi-signature wallet protections.
A Make-or-Break Moment
The pace of crypto scams shows no signs of slowing in the coming months. Analysts warn that more attacks are likely in the second half of the year as vulnerabilities persist and high-value targets remain unprotected.
As users, investors, and developers navigate this volatile environment, the need for education, transparency, and responsible development becomes more urgent.
The crypto market may be built on code, but its success will depend on trust.
Disclaimer: Cryptocurrency investments carry high risks. Always verify information and consult professionals before investing.
