Recent hacks in the DeFi sector have led to massive withdrawals and raised concerns about Wall Street's interest in crypto technologies.
Recent cyberattacks on the Drift and Kelp protocols have led to significant withdrawals from the decentralized finance (DeFi) sector, totaling over $15 billion. According to Andrew Moss from Jefferies, these incidents may stifle interest from Wall Street firms in blockchain technologies, as detailed by Bloomberg.
Notably, major financial players such as BlackRock, Franklin Templeton, and Apollo Global Management have been exploring products utilizing technologies vulnerable to the exploits attributed to the Lazarus Group. Meanwhile, the New York Stock Exchange and Nasdaq are advancing plans to trade tokenized stocks.
The real-world asset (RWA) sector has experienced a remarkable growth, with its volume increasing by about 400% since 2025, surpassing $30 billion. Ark Invest anticipates this number could escalate to $11 trillion within five years.
Moss noted that while traditional markets might remain unaffected by the hacks, many Wall Street institutions are likely to reassess their cryptocurrency strategies and risk profiles. He stated, “We do not expect financial companies to turn away from digital assets, but their tokenization initiatives may temporarily slow down.”
The Kelp hack, which resulted in a loss of $290 million, marks the largest breach of the year, while the Drift Protocol was also hit, losing $285 million. Cybersecurity specialists have linked both attacks to North Korean hackers.
Trust Erosion in DeFi
The recent hacks have sparked a crisis of trust within the DeFi community. Following the Kelp exploit, Aave, a leading lending protocol, saw investors withdrawing over $16 billion in less than a week. Additionally, the stablecoin USDe from Ethena experienced a decline of $800 million in supply within three days, indicating a broader liquidity crisis in DeFi.
“Liquidity is exiting fast, and pressure is spreading across DeFi,” noted analysts at CryptoQuant.
In response to these challenges, industry leaders are calling for improved security measures. Mikhail Egorov, the founder of Curve Finance, urged developers to collaborate on establishing unified security standards for DeFi. He emphasized the need for the Ethereum and Solana foundations to engage ecosystem projects in developing guidelines for safer practices.
“This amount of absolutely preventable hacks we see in DeFi is enormous recently,” Egorov commented.
Hayden Adams, creator of Uniswap, echoed this sentiment, stressing the importance of eliminating central points of failure to enhance security and user outcomes in the sector. He remarked that focusing on these issues is crucial for the future of DeFi.
On April 22, another incident occurred when hackers targeted the liquid staking protocol Volo, stealing $3.5 million from WBTC and USDC pools.
