According to PeckShield, a company specializing in blockchain security, the cryptocurrency industry suffered a record loss of over $4.0 billion by the end of 2025. This represents a continuing trend towards increased levels of complexity and sophistication in the types of cyberattacks aimed at the digital asset sector, making 2025 one of the worst years for the security of the cryptocurrency industry.
In a recent annual security report by PeckShield, it was reported that in 2025, compared to 2024, the amount stolen in the industry had increased by 34.2%. The overall money loss amounted to $4.04 billion, which is higher than $3.01 billion in 2024. Most of this loss was attributed to direct hacks ($2.67 billion), which have increased by 24.2% compared to 2024. The second cause of loss was through fraudulent activity/scams, which were responsible for $1.37 billion worth of theft and an increase of 64.2% from 2024.
The Bybit Breach – Crypto Security Watershed Moment
In 2025, the biggest disaster that occurred was the February hack of Bybit , which had a catastrophic financial impact on the cryptocurrency industry. The breach at Bybit resulted in losses of $1.5B and is the largest crypto theft in history. This event has changed the way conversations about securing the exchange and controlling internal access are held.
Aside from Bybit, there were other attacks that featured different types of attack vectors and vulnerabilities to the crypto ecosystem. The May 22 hack of the decentralized exchange Cetus led to a loss of $223 million to users instantly within 24-hours of hack. In August, Turkey’s largest crypto exchange, BtcTurk, was hacked for the second time in 13 months with losses of $48 million.
Private Key Compromises and Recovery Problems
Perhaps most troubling to the industry, the amount of stolen cryptocurrency that was successfully recovered fell off the face of the earth. Compared to the $488.5 million worth of digital assets recovered in 2024, only $334.9 million worth in digital assets only recovered in 2025, and this is a sharp decline in recovery efforts despite mounting losses.
Private key compromises became one of the most stubborn vulnerabilities for the entire year of 2025. Stream Finance lost $93 million on November 4, Phemex suffered an $85 million breach earlier in the year and there were several incidents in the smaller leagues that proved that even ostensibly sophisticated security arrangements remain subject to human error and lack of oversight. According to market’s comprehensive analysis, the cumulative trend during 2025 painted a stark picture of an escalating threat environment.
Social Engineering and User Specific Attacks
While technical exploits made headlines, social engineering as well as user targeted scams were responsible for significant losses. Address poisoning attacks grew more common which utilize user behavior, not purely the technical vulnerability. In these schemes, attackers send small transactions from addresses that obviously resemble legitimate addresses to hopefully make victims later copy the fraudulent address from their transaction history.
The Dec 2017 exploit of Trust Wallet’s Chrome extension version 2.68 saw more than $6.7 million in losses as reported by ZachXBT on-chain investigator. This incident appears to highlight that even non-custodial wallets are not safe from attacks that occur to users because they are running a compromised piece of software.
Conclusion
The $4.04 billion worth of losses over the entire 2025 period is not only a financial setback to the cryptocurrency industry. It’s a basic challenge to the credibility and long-term viability of the sector. Since industry is ever evolving, the contrast between innovation and security has never been more visible. The challenge for 2026 will be making short-term improvements durable security gains before the next major breach takes place.
