Crypto projects suffered losses exceeding $482 million in Q1 2026 amid increased network security measures. This comes on the back of a slow start to the year for digital assets and strict regulatory frameworks from Europe, Asia, and other jurisdictions.
Losses Compound for Digital Asset Firms
In the first three months of the year, decentralized finance (DeFi) hacks were slightly above expectations, though still low compared to previous years. A total of 44 incidents were recorded with losses above $482 million.
A major takeaway was the dominance of mid-sized attacks compared to larger ones in the last five years. Many incidents originated off-chain (outside of on-chain code). This constitutes infrastructural layers and technical setups that have become more prone to bad-actor schemes.
This first quarter generally marked the lowest since Q1 2023. Last year, the infamous Bybit incident cost the ecosystem over $1.4 billion, eroding market sentiment before bulls took control amid the corporate accumulation frenzy.
According to Hacken, phishing and social engineering scams largely dominated, while smart contract losses declined. Specifically, $306 million was lost to phishing incidents, while smart contracts and cloud services incurred $86 million and $71 million in losses, respectively.
 
A further breakdown links $40 million to North Korean hackers, while Resolv Labs’ AWS key was wiped out, costing $25 million. Last week, a group of North Korean hackers faked identities to make one $3.5 million.
Blockchain enthusiast ZachXBT wrote that one IT worker, alongside a team of 140 people, made over $1 million per month. This adds to the growing rate of crypto scams impacting markets.
“Meanwhile, DPRK-linked actors continued operating the same playbook documented in our 2025 report (fake VC calls, malware disguised as software updates, compromised employee laptops) and extracted another $40M+ from Step Finance and Bitrefill. The techniques aren’t novel. They’re just still working.”
In 2025, the FBI revealed that Americans lost $11 billion. To digital assets scams. This included 181,565 complaints from the sector, a rise from sub $10 billion the previous year. Crypto fraud schemes continue to rise despite modern security measures from several firms.
For most analysts, artificial intelligence (AI) tools have played a huge role in recent attacks. Although regulators are ramping up gears, a lot is still needed to protect retail and institutional investors. Following the report, experts pointed to Europe’s Market in Crypto Assets (MiCA) rules, amongst others.
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