In January, the crypto asset security landscape remained under sustained pressure. Security monitoring data shows that losses caused by protocol vulnerabilities and smart contract exploits reached approximately USD 370.3 million, while phishing-related scams accounted for around USD 311.3 million. Combined, total losses exceeded USD 680 million for the month.
Phishing Emerges as a Major Source of Fund Losses
From the distribution of attack types, phishing became one of the primary sources of capital outflows in January. Attackers impersonated official websites, project communication channels, or induced users to sign malicious transactions, leading victims to unknowingly authorize asset transfers.
In one security incident, a single victim suffered a loss of approximately USD 284 million due to a social engineering scam, indicating a sharp increase in targeted attacks against high-value addresses.
Social Engineering Attacks Become Highly Customized
Analysis indicates that current social engineering attacks are no longer based on mass messaging, but instead are precisely tailored using address transaction history, asset size, and protocol interaction patterns. Attackers often establish trust in advance, then prompt victims to execute authorization or signature actions at critical moments.
On-chain, such attacks often appear as technically valid contract calls, but occur at abnormal times or along unusual interaction paths, making them difficult to detect in advance using traditional blacklist-based defenses.
Technical Vulnerabilities and Human Risk Coexist
Beyond phishing and social engineering, multiple incidents involving exploited smart contract vulnerabilities were recorded in January. This underscores that, despite increasing protocol complexity, code-level risk remains a systemic issue within the industry.
Overall, crypto security threats now arise simultaneously from technical vulnerabilities and user behavior-related risks, with their combined effects significantly amplifying the impact of individual incidents.
Growing Importance of On-Chain Risk Identification
In this environment, reliance on post-incident recovery alone is no longer sufficient. Real-time identification of abnormal address behavior, authorization path changes, and interactions with high-risk counterparties is becoming a core capability of crypto security frameworks.
Some compliance and security teams have begun adopting on-chain behavior analysis and risk scoring mechanisms to flag potential threats before transactions or authorizations occur. Solutions such as Trustformer KYT, which focus on address behavior correlation and risk labeling, are designed specifically to detect these non-typical attack paths.
Long-Term Industry Impact
Persistently high security losses not only erode user trust but also accelerate regulatory attention toward crypto risk management and user protection mechanisms. Analysts note that security capabilities are no longer merely an internal technical concern, but a foundational factor influencing platform compliance readiness, institutional participation, and overall market stability.