DeFi Vulnerabilities: Advanced Attacks Reveal Deep-Rooted Systemic Issues

The cryptocurrency sector is facing a surge in advanced cyberattacks, with recent incidents highlighting the growing complexity of threats. In February 2025, Bybit suffered a $1.5 billion breach after attackers infiltrated a SafeWallet developer’s computer, compelling leading companies to revamp their security measures. SafeWallet’s CEO, Rahul Rumalla, called the breach a “turning point,” stating that it led to a complete redesign of the company’s infrastructure to fix the weaknesses the attack revealed, as reported by

. This industry-wide transformation coincides with a separate $116 million hack, which experts believe was the result of months of careful planning and disciplined execution by the perpetrators, according to .

The Balancer breach, confirmed in November 2025, involved using Tornado Cash to hide the origins of stolen assets, with blockchain records showing the attacker funded their account with 100 Ether from earlier hacks. Security professionals, including Conor Grogan, emphasized the attacker’s meticulous approach, pointing out the lack of operational errors and the use of small, inconspicuous deposits to evade detection. The incident revealed significant flaws in governance structures rather than in the underlying smart contract code, leading to recommendations for real-time monitoring of transactions to catch suspicious activity before assets are lost, as discussed in

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The industry’s reaction has been diverse. Bybit’s investigation traced the breach to a compromised SafeWallet developer’s workstation, which enabled attackers to insert harmful JavaScript into the wallet’s interface. In response, SafeWallet has upgraded its infrastructure and is advocating for unified security standards to address vulnerabilities like blind signing. At the same time, platforms such as Toobit are implementing enterprise-level protections, including Fireblocks’ Multi-Party Computation (MPC) technology, to remove single points of failure in key management, as detailed in

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There are also new regulatory and technical developments.

has unveiled plans for its HUB Token (HUBT) in the first quarter of 2026, aiming to merge self-sovereign identity (SSI) with blockchain technology to improve compliance and minimize fraud. These efforts illustrate the industry’s broader attempt to enhance security without sacrificing usability, though integrating decentralized systems with conventional financial protections remains a challenge.

With 2025 on track for unprecedented crypto theft losses, the industry stands at a pivotal moment. The intersection of state-backed hackers, organized cybercriminals, and new DeFi risks requires ongoing vigilance and innovation. The Bybit and Balancer breaches are clear warnings: in decentralized finance, the overall security is determined by its most vulnerable component.