Immunefi CEO Mitchell Amador says nearly 80% of crypto projects do not fully recover after a major hack. In his view, the stolen funds are often not the factor that destroys a platform. The deeper damage comes from paralysis inside the team, slow decisions, and a rapid loss of user trust once the incident becomes public.
The report says many teams are simply not prepared for a serious security breach. When an exploit happens, operations can freeze, critical actions get delayed, and the damage spreads across the project. That breakdown often leads to extended downtime, weaker user confidence, liquidity outflows, and long-lasting reputational harm. Funds can sometimes be restored. Trust usually cannot.
The first hours after a hack can decide the outcome
The article describes the first few hours after an attack as the most destructive period. Teams may hesitate, argue internally, or try to limit disclosure because they fear public backlash. Some projects also delay pausing smart contracts because they worry about reputational damage, and that hesitation can increase losses.
Communication failures make the situation worse. Silence fuels panic, and users may rush to withdraw assets or pull liquidity. Security experts quoted in the report say projects need to communicate quickly and openly even when the full picture is not yet available. If they do not, the market will fill the information gap on its own.
Human mistakes now rival smart contract bugs
Smart contract exploits still happen, but the report says human and operational errors have become a major source of crypto losses. Examples include approving malicious transactions, falling for phishing attacks, and exposing private keys or seed phrases. One case cited in the article involved a user who lost more than $282 million after being deceived by a fake support agent pretending to represent a hardware wallet vendor.
Kerberus CEO Alex Katz says a major exploit is close to a death sentence for many platforms. Once users lose confidence, they remove funds, liquidity disappears, and the project struggles to stay viable. Even if the technical issue is fixed, reputational damage often remains.
Crypto hack losses reached $3.4 billion in 2025
According to the report, total crypto-related hack losses hit $3.4 billion in 2025, the highest level since 2022. It also says around 69% of those losses came from just three major incidents, including the $1.4 billion Bybit hack. The figures point to attacks growing in both size and complexity, affecting platforms and individual users alike.
The story also highlights AI as a rising risk factor. Attackers are using artificial intelligence to run large-scale social engineering campaigns, sending thousands of personalized phishing messages every day. That makes attacks more efficient and can raise success rates, especially against less-experienced users.
Security tools alone are not enough
Even with the threat level rising, the article notes some optimism inside the industry. Amador says 2026 could become the year of crypto security, supported by better development practices, stronger audits, on-chain monitoring tools, and higher-grade threat intelligence and firewall systems.
Still, the article makes a clear point: technical defenses alone will not save a project after a breach. Teams also need incident response plans and communication strategies in place before an attack happens. Once a hack begins, the ability to contain losses and keep user confidence intact can determine whether a project survives.