Opinion by: Orest Gavryliak, Chief Legal Officer, 1inch Labs
Breaking bybit in February broke the note for Biggest hack in crypto history. North Korea Cybercriminals have stolen more than $ 1.4 billion in a glance of one eye, along with a violent heist that makes news worldwide.
Now, as TRM LABS Reports, $ 2.1 billion worth of crypto have been lost in attacks in the first half of 2025. That’s an excessive amount of money, and nevertheless, the hacks seem to be set to continue.
While close attention is paid to these shocking robbers, there is no sufficient investigation of how these hackers managed to handle crypto handling. Centralized exchanges (CEX) and defi protocols have lessons to learn from devastating incidents – for a variety of reasons.
CEXs should make changes
For trading platforms depending on millions of users around the world, significant changes should be made to how the transactions are signed. Depending on a summary of the user interface is no longer good enough; Instead, it is important to decode call data. Only then can the executives be confident that funds moving from a cold purse will reach their intended destination.
Other cutting solutions include “intelligent co-signers” that confirm the transaction and signatures. This ensures the weakening requests are automatically rejected, even if all the necessary approves are present.
Transactions can now be simulated before signatures occur, in conjunction with the real-time intelligence threat that flagged call data at high risk. Making an integrated transition to multi-party calculation-where private keys are divided into many shards and not fully assembled-can prove to be a compelling alternative to intelligent contracts.
In recent crypto hacks, the interfaces have been manipulated. Evil actors have cheated executives in accidental allowance of malicious transactions. Over 80% of the crypto stolen throughout 75 hacks until this year has been obtained in so-called infrastructure exploits, which, on average, are made 10 times more than other types of attacks.
Obviously a pattern begins to form, and it is not acceptable for CEXs not to adapt in response to this established threat.
Defi must oppose hackers
The first step is to make it difficult for hackers to treat exchanges such as their own personal piggy bank, with stable care that will close the vectors’ attacks. In the next step of the hackers’ journey, when they try to transfer the prohibited funds through decentralized platforms, important improvements need to be made as well.
Bybit CEO’s failure Ben Zhou could be pale when he was trying to freeze the extensive amount of ETH to swing from his platform in February. Blockchain Analytics has shown that funds are spreading to many Wallets On the way -The transactions – dividing $ 1.4 billion into countless small shards. In When the shift occurs Podcast, he described Trying to contact the platforms where the crypto was moved, but by the time he received a response, the funds were moved elsewhere.
This is why defi protocols need to ramp up efforts to prevent hackers from taking advantage of their infrastructure. A mixture of risk intelligence, transaction monitoring, wallet screening and risk management software can all paper here – without compromising decentralization.
Related: Crypto Seed phrase, front-end hacks drive record losses in 2025: TRM Labs
Some solutions use 24/7 real-time intelligence, while others also include human-based intelligence to respond quickly to incidents as they open up. When paired with an advanced, Multitasking Management Management Dashboard corresponding to the DeFI, this technology can screen contacts and transactions against blocked addresses, assign purses to monitor zones, and apply real-time risk marking for addresses.
This layered provides for the discovery of malicious activities within seconds, empowering security teams to interpret the anomalies in conducting, cooperating with external intelligence providers, and to take a quick action with complex or unclear situations in which human judgment is important. Delicious purse and IP connections can be locked before the funds are lost.
There is nothing wrong with healthy competition between exchanges and defi protocols. Customers’ eligible choice. A hack against a platform should, however, be treated like an attack against all of them.
The close partnership is not just a good PR exercise; This is an opportunity to produce a united front against thieves that destroy the future of this industry. Each hack dents consumer confidence, and if they continue to occur, regulators may be left with no choice but to impose restrictions that also punish crypto users and developer users.
Self -regulation is the future
By design, Defi protocol is open to all users and does not supervise, manage or “police” such as a centralized alternative. A non-custodial approach means that defi developers cannot freeze prohibited funds passing through their platform. Lawmakers may not fully appreciate how defi platforms work, and as a result, developers are often accused of other people’s activity, even though they are not personally responsible for these transactions.
Recent crypto hacks need to serve as a wake-up call. Responsible Defi Developer must rally together to create excellent management and security models that maintain technology advances. Careful protocol design, layered defense systems and ongoing security tests have the potential to make crypto hacks that are not worth it for the opportunities to steal.
The deeper truth is clear. If the crypto fails to regulate itself, it can be one of the most compelling counterarguments against the free market itself.
Despite its flaws, traditional finances (Tradfi) operate under a clear set of implemented policies created by regulators – a form of central planning acting as a buffer against systematic risk and crime. On the contrary, Defi, is proud of herself in removing mediators and embracing pure dynamics in the market. Continued events show that absolute freedom may not be maintained without even a thin layer of coordination or care.
Perhaps perfect is not a 100% free market but an 85% one, with the remaining 15% serves as a programmable rule layer designed to uphold security, avoid abuse and promote trust. Not to copy the tradfi bureaucracy but to implement automatic, transparent and minimally invasive standards for things such as anti-money laundering, fraud detection and risk recognition.
Imagine this not as a top-down control but as a protocol-level guardrails: clever, modular layer that allows DeFI to maintain openness while ensuring responsibility. These can be driven by the community, open resources embedded directly to protocols, decentralized application and interface-a collective effort to reduce systematic threats without compromising decentralization.
Defi does not need to mimic the tradfi to be mature, but freedom without responsibility can invite chaos. The goal is not to tighten the change but in the future-it will be proof of shared standards, ethical design and stability.
Yes, it will take time. Yes, it will take an investment. And yes, it will require an experiment and some misunderstandings. But in the long run, the dividends will be huge.
Opinion by: Orest Gavryliak, Chief Legal Officer, 1inch Labs.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
