Why Crypto Hacks End Nearly 80% of Projects After Attacks

What Really Kill Project After Crypto Hack? Immunefi CEO Share Insight

A growing body of evidence suggests that crypto hacks cause more damage than just lost funds. According to security experts, 80% of majorly hacked projects never fully recover, not because of the stolen money alone, but because projects and operations break down in the critical hours after an attack.

The warning was recently highlighted by Wu Blockchain, citing insights from industry leaders who closely track security incidents across the ecosystem.

Source: X Account

Trust Loss Is the Real Impact of Crypto Hacks

Mitchell Amador, founder of Immunefi, explained that most projects fail after due to poor response rather than the size of the exploit itself.

While stolen funds can sometimes be recovered or offset, trust is far harder to rebuild once users lose confidence.

Key issues seen after major hacks include

• Slow or unclear communication with users
• Delays in pausing smart contracts
• Fear-driven silence from project teams
• Panic withdrawals and liquidity loss
• Long-term damage to brand reputation

Amador stressed that even if technically strong, it can collapse if they mishandle the response phase.

2025: A Record Year for Crypto Exploits

The timing of this warning is especially important. In 2025, total losses from and exploits reached around $3.4 billion, the highest level since the 2022 market peak.

This sharp rise shows that despite better tools and audits, attackers are still finding ways to exploit systems. More importantly, many platforms remain unprepared for crisis management once an exploit occurs.

In many cases, users leave not because of the hack itself, but because they feel left in the dark.

Human Error Now a Bigger Risk Than Code

Security leaders say the nature of crypto exploits is also changing.

Alex Katz, CEO of Kerberus, noted that human factors now outweigh pure code bugs as the main source of damage.

Common causes include:

• Approving malicious transactions
• Falling for social engineering attacks
• Exposed private keys
• Weak internal response plans

Once these failures happen, the exploit often marks the start of a steady decline that platforms struggle to reverse.

Media Coverage Highlights a Wider Shift

Major crypto hacks news outlets, including Cointelegraph, have widely covered the issue. Headlines focusing on long-term damage, rather than stolen funds alone, spread quickly across X and other platforms.

Many of these reports emphasize that trust and operations, not money, are the real breaking points after a hack.

This coverage reflects a wider shift in how the industry views security.

Why This Matters Right Now

For years, the main advice to teams was simple:
Build better code and get more audits.

That advice is no longer enough.

Experts now argue that platforms must also build strong crisis readiness, including:

• Clear incident response plans
• Fast decision-making authority
• Honest and regular user updates
• Pre-approved contract pause actions
• Dedicated security communication roles

Without these systems in place, even a small exploit can turn into a fatal event.

A Cautious but Optimistic Outlook for 2026

Despite the risks, Amador shared a hopeful view of the future. He believes 2026 could be a breakthrough year for smart contract security, driven by:

• AI-based threat monitoring
• Better real-time alerts
• More mature audit standards
• Improved team training

However, he made one point clear:
Response readiness must be treated as core infrastructure, not an afterthought.

Projects that prepare for the worst before it happens stand the best chance of surviving when something goes wrong.

The Bottom Line

Hacks are no longer just technical events. They are trust events.

The data shows that once trust is lost, most projects never return to their former strength. As exploits continue to rise, the projects that survive will not just be those with strong code but those with clear plans, fast action, and honest communication when it matters most.

In today’s market, trust may be the most fragile asset of all.