Crypto security risks rise as hacks expose bitcoin custody weak points
Crypto theft is intensifying as attacks move beyond direct key theft and expose weaknesses in exchange systems and hardware wallet supply chains. Losses escalated from $2.9 billion across nearly 150 crypto hacks in 2025 to $6.3 billion in 20 minutes during the Oct. 29, 2026 Binance breach, underscoring broader operational risks for bitcoin holders.
Highlights
- North Korea-linked hackers stole approximately $1.5 billion in the Bybit breach (February 2025) and conducted the Oct. 29, 2026 Binance attack.
- Binance halted deposits/withdrawals, revoked fraudulent authorizations, and fully reimbursed customers using Secure Asset Fund for Users following the 2026 hack.
- Ledger and Coldcard hardware wallet incidents exposed risks of unauthorized implants and firmware flaws, enabling key recovery phrase theft or predictability.
Recent breaches reshape custody threat model
As reported by Weiss Ratings, recent attacks show that crypto losses can surge even when private keys are not directly stolen and core cryptography remains intact.The article highlights the February 2025 Bybit breach, in which North Korea-linked hackers stole about $1.5 billion, and the Oct. 29, 2026 Binance attack, where hackers accessed a software engineer's laptop and used that access to approve transactions that would otherwise have been unauthorized. Binance halted deposits and withdrawals, revoked fraudulent authorizations and said it covered customer losses through its Secure Asset Fund for Users and its own funds. The FBI later attributed the Binance attack to the same North Korean group tied to the Bybit theft.
It also points to two hardware wallet incidents that raise concerns for self-custody users. Ledger confirmed unauthorized implants in devices shipped by then-authorized third-party seller CryptoBilis, allowing recovery phrases to be copied and transmitted over a mobile network during setup. A separate Coldcard wallet exploit stemmed from a firmware-related flaw dating to 2021 that could weaken seed phrase randomness, potentially allowing attackers to derive keys from funded wallet addresses.
Our earlier report on the Bank of England’s push for “bare metal” recovery planning explained why regulators want banks to be able to restore critical services even if primary technology environments are compromised. It highlighted concerns that AI is increasing the scale and complexity of cyber attacks, making end-to-end recovery options and stronger resilience requirements a growing priority for financial stability.
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