Crypto Hacks And How To Secure Your Crypto

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Hacks in crypto are a common thing, so it's best if you stay prepared to tackle them. The best ways to secure your crypto are:

Don’t share your seed phrase;
Make sure you understand what does smart-contract asks you to sign;
Support will never contact you first;
There is no account that needs a password reset;
Don’t keep funds on the exchange platforms.

A deep but short dive into why hacks happen in crypto, which ones are the most common and how to protect yourself from being drained.

Risk warning: Cryptocurrency markets are highly volatile, with sharp price swings and regulatory uncertainties. Research indicates that 75-90% of traders face losses. Only invest discretionary funds and consult an experienced financial advisor.

Why crypto hacks happen and what pattern do they follow

See, in crypto CEXs get hacked so often people don’t care that much anymore. What’s that? A Bybit hacked by Lazarus for 500,000 ETH ($1.5B) in 2025? Oh that's new (no). Every hack follows a pattern — weak security makes a good target for the state owned hackers called Lazarus Group.

Avoiding 99% of Crypto Hacks

Who and why made hacking crypto their business?

You see — North Korea made hacking a business: they run Lazarus Group, state funded hackers, to get some foreign currency income stream in the form of scamming the hell out of the crypto market and anything that has a «tech» tag on it. Those hackers receive government training, living quarters, treated as society elites and are hand-picked from math olympiad champions — they are raised to be purebred netrunners, much like Arasaka does in Cyberpunk 2077.

So far, Lazarus had: Nicehash (4500 BTC perish), Bithumb ($7M perish), Axie Infinity & Ronin Bridge ($620M perish), Horizon Bridge ($100M perish), Atomic Wallet ($100M perish), Indian CEX WazirX ($234M perish) and since 2021 they do social engineering of open-source GitHub repos. The good thing Lazarus Group did is butchering the «Stake.com» online casino — mad respect.

How do CEXs get hacked most of the time?

To understand this, let’s explore a bit of CEX hacking history:

MtGox, Tokio, 2011, responsible for 70% of BTC transactions. $8.75M stolen, another attack in 2014, this time for 850000 BTC. Case: fake bitcoin flooding.
KuCoin, 2013, $281M siphoned out, hot wallet keys leaked. Culprit: Lazarus Group, government hackers from NK. Within weeks they managed to recover $204M.
UpBit, 2019, one transaction attack, $45M leaked out, traces of Lazarus Group.
Binance, 2019, claims to be super safe, 7000 BTC perish along with API keys, two-factor codes, and seed phrases. Claims that SAFU fund — backed by BNB — takes care of that. Later in 2022 Binance Bridge got slapped with a protocol hack, wiping out 2B BNB.
Bitfinex, owned by makers of Tether, 2016, $60M perish in an attack. In 2019 US retrieves some of the coins, and in 2021 attackers move out stolen crypto to sell it later.
Cryptopia, 2019, $15.5M perish, complete CEX liquidation.
Zaif, 2018, hot wallet keys are taken, $60M perish.
Bancor, 2018, $23.5M perish, complex sybil attack.
Coincheck, 2018, $534M perish, phishing.
CoinBene, 2019, $105M perished and they tried to hide it.

Notice the pattern? Each time hacks happen for two reasons: poor security and insiders. FTX isn’t on the list because that exchange was made for illicit purposes — it wasn’t scammed or hacked, but operated by scammers. Aside from CEXs getting hacked left to right, the major hacking route is still — and remains to the day — about your personal wallet.

Want to know how all of the hacks affect crypto prices? 9/10 times FUD spreads, people panic, crypto starts to swing here and there — after Bybit hack ETH tanked, after Binance got rugged their BNB tanked. Every time a CEX is hacked — you immediately sell crypto (coins and tokens) involved in the hack, no exceptions.

Here’s one trick to save you from every CEX hack: keep private keys to yourself and store only 10% of your portfolio on the trading platform.

The most common types of crypto hacks

According to Chainalysis — guys who deal in crypto crime — theft of personal crypto is at an all time high with a rise from $857M to $1.7B. Thanks to AI Pig Butchering in Crypto is at an all time high with 40% growth YoY, and most of the hacking happens because people willingly give out their private keys.

Growth of crypto hacks

5 major crypto hack types

Address poisoning — virus replaces wallet address upon copy-paste.
Blackmail/Sextortion — you are manipulated by AI-forged sextapes and pornpics you swear isn’t you but look really real.
Crypto Drainer — you enter a seed phrase on the wrong website or sign a wrong smart-contract without even looking.
Livestream — you flashed the SEED PHRASE in front of millions of subscribers.
Pig Butchering — editor’s favourite, the one that involves you telling your seed phrase by yourself.

Notice the pattern? 1 case of advanced virus, 4 other are psychological trickery.

How can you prevent crypto hacks for yourself?

How to prevent crypto hacks as a user

While enterprise-level hacks are not in your hand, you can still make moves to save yourselves from user-based hacks. Here are key things to keep in mind:

Don’t share your seed phrase. Your seed phrase is the only way into your wallet. If someone gets it, they have full control. Never give it out — even if they claim to be from the support team. And don’t store it in your email, phone, or cloud.
Understand what you’re signing. Hitting “Approve” without checking what a smart contract wants can be a disaster. Some can sneak in full wallet access. If something looks shady or too technical, pause and ask someone you trust before moving forward.
Support will never contact you first. A real crypto support team won’t DM or email you out of the blue. If that happens, it’s almost always a scam. Only reach out using links from official sites, especially if you’re dealing with platforms like exchanges or wallet apps.
There’s no account that needs a password reset. No one can reset a crypto wallet like a Facebook account. If you get an email saying you need to reset something, it’s likely a scam. Your access depends on your seed phrase, not a password recovery link.
Don’t keep funds on the exchange platforms. Even the biggest crypto exchanges have been hacked. If you’re not trading, move your coins to a private wallet. Exchanges are handy — but they were never meant to be a savings account. You’re safer holding your keys, not trusting a platform to do it for you. You can use wallets such as Trust Wallet. Trust Wallet stores your private keys right on your mobile device. This means that only you can access your wallet and funds. Unlike custodial wallets, Trust Wallet does not see or manage your keys.

Do regulated crypto exchanges lower the risk of crypto hacks?

Yes, regulated crypto exchanges do lower the risk of hacks. They’re required to follow strict security standards, conduct regular audits, and hold insurance in some cases — all of which help protect your funds. If you’re looking for a reliable, regulated exchange to trade safely, we’ve researched and presented the best options below to help you make a confident choice:

Best regulated crypto exchanges
	Foundation year	Min. Deposit, $	Coins Supported	Spot Taker fee, %	Spot Maker Fee, %	TU overall score	Open an account
Kraken	2011	10	278	0.4	0.25	8.7	Go to broker Your capital is at risk.
Coinbase	2012	10	249	0.5	0.5	8.46	Go to broker Your capital is at risk.
Nebeus	2014	5	30	Not available	Not available	7.84	Go to broker Your capital is at risk.
Crypto.com	2016	1	250	0.5	0.25	7.24	Go to broker Your capital is at risk.
Nexo	2018		100	0.04	0.07	7.13	Go to broker Your capital is at risk.

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Protect offline, split seed, and whitelist withdrawals early

Most people think buying a hardware wallet means they’re fully protected — but that’s only part of the story. If you set up your recovery phrase on a laptop that’s been online, there’s already a risk. The best move? Generate your seed phrase completely offline, even better on a device that’s never touched the internet. And don’t just save it in one place. Tools like Shamir’s Secret Sharing let you split that phrase into parts, so no single piece is enough to steal your funds.

Here’s something even seasoned traders miss: go into your exchange settings and set withdrawal limits and whitelist wallet addresses. That way, even if someone gets into your account, they can’t just send your crypto anywhere. Think of it like locking the back door, not just the front. You’re not just stopping hackers — you’re slowing them down long enough to realize something’s off before anything gets stolen.

Conclusion

Let’s be real — scams don’t always come through sketchy emails or shady websites. Sometimes, it’s a well-written message that catches you off guard on a tired Monday. Security isn’t just about turning on 2FA or buying a cold wallet — it’s about being sharp every time you click, sign, or respond. The biggest risks often hide in routine habits. If you want to stay in this game, don’t just protect your crypto — train yourself to spot the trick before it happens.

FAQs

Is it safe to keep money on the trading platform?

Never was, never will be, keep your money inside a cold wallet you made yourself. Don’t use hardware wallets you bought from anyone, don’t trust people with your seed phrase.

Is it safe to use Telegram/WhatsApp/Viber bots to swap crypto into USD/INR?

No. Never was, never will be. If people claim that particular bot is fine — you risk it with your money, they risk it with nothing but giving advice.

Is keeping money in a cold wallet instead of a bank account safer?

Both are equally risky: you can’t trust the government, nor can you trust the centralized exchange, so pick the lesser evil.

I want to trade and keep my funds 100% safe, how’d I do that?

Trade with CEXs, use DEXs, use WalletConnect, use secure account auth, use 2FA, use Google Authenticator, use OTP codes, use Face ID, use anti phishing codes, don’t ever give out your seed phrase or you’re done.

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Team that worked on the article

Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income.

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Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets.

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