The nearly $150 billion decentralised finance (DeFi) sector of the cryptocurrency market faces serious security vulnerabilities that put it at risk of hacking and theft, according to Chainalysis, the world’s largest crypto tracing company. How can you avoid becoming a victim of crypto fraud, and what rules should you follow to protect your savings?

Crypto markets are booming this year thanks to U.S. President Donald Trump’s embrace of the industry, which has driven bitcoin and other tokens to record highs. Jonathan Levin, CEO of Chainalysis, told the Financial Times that the rapid expansion of DeFi platforms — which operate on blockchains and without intermediaries such as banks — has left users’ assets increasingly vulnerable.

“Everyone in on-chain finance is focused on increasing value in the sector, rather than securing what’s actually locked on these platforms,” Levin said.

DeFi groups, mostly start-ups founded by small teams, have grown into multibillion-dollar businesses. But as they expand, so do the threats. Security has become a major concern as crypto hacks reach record levels — more than $2.2 billion worth of crypto was stolen in the first half of 2025, according to Chainalysis, surpassing the total for all of 2024.

However, individuals can also take simple yet effective steps to secure their assets. These measures are not that different from the safety rules applied to online banking or digital payments.

Use only trusted platforms

Avoid using platforms you or your friends don’t know. Always check online reviews and independent sources before investing or transferring any funds.

Be sceptical of unsolicited offers

If something sounds too good to be true, it probably is. Be cautious with unsolicited messages or emails promising big returns for minimal effort. Always verify the legitimacy of offers — and never click suspicious links.

Use two-factor authentication

Two-factor authentication (2FA) is a basic yet powerful tool that adds an extra layer of protection. Reliable financial institutions and platforms usually provide it — always enable it when available.

Keep your private keys safe

Your private keys and recovery phrases are the keys to your digital wealth. Never share them and consider keeping them offline to reduce exposure to online attacks.

Stay informed

New crypto scams emerge constantly. To stay ahead, follow trusted crypto news sources, security experts, and educational resources. Awareness remains one of the strongest defences against fraud.

Sources:

https://www.ft.com/content/70faf2ae-8279-49cd-97c1-20654d935be8

https://www.investopedia.com/crypto-scams-and-how-to-protect-yourself-11719977

https://www.chainalysis.com/blog/preventing-crypto-fraud-with-off-chain-on-chain-data/