Can the crypto industry effectively counter the surge in seed phrase and front-end protocol attacks in 2025

In the first half of 2025, crypto losses reached a staggering $2.1 billion, with over 80% attributed to infrastructure exploits such as seed phrase hijacking and front-end protocol compromises, according to blockchain intelligence firm TRM Labs. These attacks target the core technical infrastructure of crypto systems, exploiting foundational vulnerabilities and often leveraging social engineering tactics to deceive users and gain unauthorized access.

This surge in sophisticated exploits marks a critical challenge for the crypto industry, highlighting the urgent need for robust security measures that protect users’ private keys and the interfaces they interact with daily.

State-sponsored attacks amplify the scale and sophistication of crypto thefts

A significant portion of the losses in 2025 stems from state-sponsored actors, with North Korea’s $1.5 billion hack of the Dubai-based crypto exchange Bybit in February representing nearly 70% of total thefts. Other geopolitical groups, such as the pro-Israel hacker collective Gonjeshke Darande, have also contributed to the rising threat landscape by targeting major exchanges like Iran’s Nobitex.

These state-backed operations demonstrate a strategic intent to disrupt and exploit crypto infrastructure, raising the stakes for industry defenders and regulators alike.

Did you know?
The average size of crypto hacks in the first half of 2025 nearly doubled to $30 million compared to $15 million in the same period of 2024, driven largely by high-profile state-sponsored attacks.

Multifaceted collaboration is essential to combat evolving threats

TRM Labs emphasizes that combating these sophisticated attacks requires a coordinated approach involving global law enforcement, financial intelligence units, and blockchain analytics firms. Strengthening partnerships across jurisdictions and sectors will be crucial to identifying, tracking, and prosecuting malicious actors.

Such collaboration can enhance threat intelligence sharing, improve response times, and foster the development of industry-wide best practices aimed at mitigating risks.

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Reinforcing fundamental security practices remains a critical priority

The report highlights the importance of foundational security measures, including multifactor authentication, cold storage of assets, regular security audits, and advanced social engineering countermeasures. Prioritizing insider threat detection and educating users about phishing and other manipulative tactics are equally vital to reducing vulnerabilities.

By reinforcing these basic defenses, crypto firms can better safeguard assets and build greater trust with users and investors.

The industry faces a pivotal moment to evolve its security posture

With losses in the first half of 2025 already surpassing the total for all of 2024, the crypto sector stands at a crossroads. The escalating scale and sophistication of attacks underscore the necessity for a strategic, sustained, and collective security posture that anticipates not only criminal activity but also covert statecraft.

Adopting innovative technologies, fostering transparency, and embracing regulatory cooperation will be key to securing the future of digital assets.