Chainalysis CEO Warns of Large-Scale Attacks on DeFi Sector

The decentralized finance (DeFi) sector, now valued at nearly $150 billion , is facing escalating security challenges that put investors’ assets in danger, according to Chainalysis CEO Jonathan Levin, who spoke to The Financial ￰0￱ warned that DeFi’s explosive growth built on blockchain platforms with no intermediaries—has largely ignored cybersecurity concerns. “When you're creating a protocol in your mum’s basement, you don’t have a security director from GCHQ,” Levin said wryly, referencing the British intelligence and security ￰1￱ added that the DeFi community remains fixated on profits rather than protection: “Everyone in on-chain finance is focused on value growth, not on the security that’s effectively locked into these platforms.” Hacks Surge as DeFi Protocols Lose Billions According to data from DeFiLlama, decentralized finance protocols currently hold over $140 billion in crypto ￰2￱ such as Aave and EigenLayer have grown rapidly, attracting billions from users seeking high ￰3￱ that growth has come at a price.

A series of large-scale hacks have exposed deep vulnerabilities in the DeFi ￰4￱ week alone, over $128 million was stolen from the Balancer protocol in a single ￰5￱ May 2025, hackers drained another $223 million from the decentralized exchange Cetus Protocol, exploiting weak points in its smart contract ￰6￱ emphasized that many startups are simply not equipped to handle such threats: “The security of decentralized platforms hasn’t really been considered, even by those receiving venture capital ￰7￱ I look at some of the most successful protocols, I see vulnerabilities that could easily be exploited by hackers from North Korea.” The Growing Role of State-Linked Hackers Cybercrime analysts have identified an alarming trend: state-sponsored hacking groups—especially those linked to North Korea—are increasingly targeting crypto ￰8￱ to TRM Labs, criminals stole $2.1 billion in digital assets during the first half of 2025 alone, nearly matching the total losses for all of ￰9￱ reported similar findings, estimating that North Korea-linked hackers stole more than $2 billion worth of cryptocurrency this ￰10￱ largest single incident occurred in February 2025, when North Korean hackers stole $1.5 billion from the Bybit exchange.

Meanwhile, experts have discovered around 500 fraudulent tokens on the Base network, further highlighting the risks facing investors. Chainalysis, valued at $8.6 billion in 2022 works with governments and companies to trace stolen funds and strengthen cybersecurity defenses across the crypto industry. “The creation of on-chain exchanges and prediction markets requires interaction with smart contracts and that introduces an entirely new level of risk,” Levin ￰11￱ a reminder, Europol recently reported a surge in the scale and sophistication of cryptocrime, warning that international coordination and major resources are needed to investigate these evolving threats.