Crypto hacks are a wake-up call for DeFi.

Opinion by: Orest Gavryliak, chief legal officer, 1inch Labs

The Bybit breach in February smashed the record for the biggest hack in crypto history. More than $1.4 billion was stolen by North Korean cybercriminals in the blink of an eye, with the audacious heist making headline news around the world.

Now, as TRM Labs reports, $2.1 billion worth of crypto has been lost to attacks in the first half of 2025. That’s an exorbitant amount of money, and yet, the hacks seem set to continue.

While close attention was paid to these brazen thefts, there hasn’t been enough scrutiny of how these hackers managed to launder the crypto holdings. Centralized exchanges (CEXs) and DeFi protocols have lessons to learn from these devastating incidents — for different reasons. 

CEXs must make changes

For the trading platforms relied on by millions of users worldwide, significant changes must be made to how transactions are signed. Depending on a user interface summary is no longer good enough; instead, it’s crucial to manually decode call data. Only then can executives be confident that funds moving from a cold wallet will reach their intended destination.

Other cutting-edge solutions include “intelligent co-signers” who validate the transaction and the signatures. This ensures suspicious requests are automatically rejected, even if all required approvals are present. 

Transactions can now be simulated before signatures take place, coupled with real-time threat intelligence that flags high-risk call data. Making a concerted shift to multi-party computation — where private keys are split into multiple shards and never fully assembled — can prove to be a compelling alternative to smart contracts.

In recent crypto hacks, interfaces were manipulated. Bad actors deceived executives into accidentally authorizing malicious transactions. Over 80% of crypto stolen across 75 hacks so far this year was taken in so-called infrastructure exploits, which, on average, made off with 10 times more than other attack types.

It’s clear that a pattern is beginning to form, and it’s unacceptable for CEXs not to adapt in response to this established threat.

DeFi must defy hackers

The first step is to make it prohibitively difficult for hackers to treat exchanges like their own personal piggy bank, with robust safeguards that close off attack vectors. In the next step of the hackers’ journey, when they attempt to move illicit funds through decentralized platforms, essential…