North Korea-Linked Theft and Poor Key Security Dominate Web3 Losses: Hacken

In one of the most alarming reports of the year for the crypto news and blockchain community, cybersecurity firm Hacken revealed that Web3 losses soared to nearly $4 billion in 2025, with North Korean-linked hackers responsible for more than half. The findings underscore growing concerns about the security of blockchain technology, the vulnerabilities within decentralized systems, and the need for immediate regulatory action.

According to Hacken’s 2025 Yearly Security Report, total losses reached $3.95 billion, marking a $1.1 billion increase from 2024. A staggering 52% of those funds were attributed to North Korean threat groups. While losses declined from over $2 billion in Q1 to $350 million in Q4, the report warned that the overall risk is now systemic, not limited to isolated technical errors.

“The story of 2025 isn’t just about code bugs it’s about operational control and accountability,” the report stated.

Access Control Failures Behind Most Losses

Hacken analysts found that access control weaknesses and poor operational security caused the majority of 2025’s recorded losses worth approximately $2.12 billion, or 54% of the total. By contrast, smart contract vulnerabilities accounted for just $512 million.

The Bybit breach, one of the most significant incidents of the year, accounted for nearly $1.5 billion in stolen funds, largely attributed to North Korea-affiliated cyber groups. Hacken labeled it “the largest single theft on record,” exposing how critical it is for Web3 companies to enforce strict private key management and custody procedures.

“The biggest, least recoverable losses stem from compromised signers, weak keys, and sloppy off‑boarding procedures,” Hacken’s report concluded an assessment now widely circulated across crypto pur and cybersecurity circles.

Regulation Tightens, but Implementation Lags

Yehor Rudystia, head of forensics at Hacken Extractor, told Cointelegraph that while regulators have made progress in defining “what good looks like,” many firms still fail to implement even the most basic security measures across their blockchain operations.

“Regulatory frameworks in the U.S. and European Union now specify clear expectations like role-based access control, audit logging, identity verification, cold storage, and continuous anomaly detection but too many companies treat them as optional,” Rudystia said.

He described how some Web3 startups still rely on a single private key to manage entire protocols, neglect to revoke developer access during off‑boarding, or skip Endpoint Detection and Response (EDR) tools entirely.

“Regular penetration testing, incident simulations, and independent audits should be non‑negotiable in 2026,” Rudystia emphasized, adding that large exchanges must model institutional-grade custody with multi‑party computation (MPC) or multi‑sig wallet setups for risk mitigation.

Moving From “Soft Guidance” to Enforceable Rules

With repeating breaches undermining investor trust, Hacken predicts that 2026 will mark the transition from soft guidance to hard legal requirements.

Co-founder and CEO Yevheniia Broshevan told Cointelegraph that the coming wave of regulation could raise the industry’s minimum security standard dramatically, a shift long awaited by the blockchain technology community.

“We see a significant opportunity for the industry to raise its security baseline by adopting clear protocols for signing hardware and continuous monitoring tools,” Broshevan said. “If these rules become mandatory, 2026 could be the year Web3 rebuilds its reputation for user protection.”

North Korea’s Threat Playbook and Global Response

Given that North Korea-linked hacker clusters were responsible for more than half of Web3 losses in 2025, Hacken urged regulators to identify such actors as specific supervisory priorities.

Rudystia recommended that authorities focus on real-time intelligence sharing about North Korean threats, enforce risk assessments targeting phishing-led access attacks, and establish safe-harbor protections for cooperating firms. “Graduated penalties should apply to platforms that fail to comply,” he added.

The latest data shows how crypto pur ideals of self-sovereignty and decentralization are clashing with rising operational risks and nation-state threats. But experts agree that with accountability, audits, and automated safeguards, the blockchain ecosystem can mature into one of the most secure financial systems in the world.

Hacken’s findings send a clear message as 2026 approaches: strong cryptography doesn’t secure Web3 disciplined key management does.