Crypto Investors Lose Over $1.6 Billion to Hackers in First Quarter

That’s more than two-thirds of last year’s total. Less than 1 percent of the stolen funds have been recovered.

A price chart on the Bybit website for the cryptocurrency Ethereum is seen on a computer screen in New York on Friday evening, Feb. 21, 2025. AP Photo/Patrick Sison

Crypto investors suffered massive financial losses in Q1, 2025, with a major exchange breach accounting for most of the loss, according to a report by blockchain security company CertiK.

A total of $1.67 billion worth of crypto was lost in Q1 this year across 197 incidents due to hacks, scams, and exploits, the company said in the April 1 report. This is more than 300 percent higher than the previous quarter and is already over two-thirds of the $2.39 billion stolen for the entirety of 2024. The average loss per incident in the first quarter was $9.54 million.

The global cryptocurrency market was worth around $2.87 trillion as of April 2. The $1.67 billion in losses represent almost 0.06 percent of the market.

The vast majority of Q1 losses, amounting to $1.45 billion, were the result of a single “catastrophic event”—the Bybit exploit.

Bybit, the second largest crypto exchange in the world, announced the hack on Feb. 21, with the breach happening while the company was making a routine transfer of ETH cryptocurrency between its crypto wallets.

“The fallout from Bybit’s breach has since sent shockwaves throughout the industry, raising urgent questions about security measures at centralized exchanges, with many regulators and security firms calling for stronger protective measures,” the report said.

According to the report, only 0.38 percent of stolen funds were returned this quarter, which is far less than the 42.09 percent in the previous quarter. In February, no stolen funds were returned.

The most targeted blockchain for exploits was Ethereum, which suffered $1.54 billion in losses during the first quarter across 98 security incidents.

The blockchain’s “dominance in decentralized finance (DeFi) and smart contract activity makes it a lucrative target, with billions of dollars locked in protocols vulnerable to contract exploits and permission mismanagement.”

CertiK said that advancements in security are now struggling to keep pace with sophisticated attacks, with hackers making use of a variety of tools such as artificial intelligence, social engineering, and contract manipulation to “bypass even the most robust defenses.”

As crypto adoption rises, the company expects the “amount stolen will continue to rise” as well. “The coming quarters will be a critical test of the industry’s resilience,” said the report.

CertiK said that the first quarter saw “notable regulatory and strategic developments” such as the United States deciding to form a strategic cryptocurrency reserve and the Securities and Exchange Commission (SEC) launching a crypto task force.

While these measures aim to offer “greater clarity and stability” to the broader ecosystem, they have “thus far done little to address the immediate security risks that continue to plague the industry,” the report said.

A Crypto Stockpile

Plans to create a U.S. crypto reserve have been put in place by the Trump administration.

“A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden administration, which is why my executive order on digital assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve,” President Donald Trump said in a March 2 Truth Social post.

The reserve is expected to include Bitcoin, ETH, XRP, SOL, ADA, and other valuable cryptocurrencies. “I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!”

The executive order on digital assets was signed by Trump on Jan. 23. In addition to evaluating the possibility of creating a strategic national digital assets stockpile, the Presidential Working Group is also tasked with developing a federal regulatory framework for digital asset governance.

The same month, the SEC announced creating a task force, the focus of which “will be to help the commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously,” the agency said.

So far, the SEC has mostly relied on enforcement actions for regulating crypto assets, using untested and novel legal interpretations to get the job done, it said.

However, “clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud.”

The task force aims to resolve the issue by charting out a “clear and comprehensive” regulatory path for crypto assets.