Crypto scams and hack losses plummeted dramatically in March, signaling potential improvements in security. However, despite the decline, smart contract vulnerabilities still pose a major threat to the industry.

Significant Drop in Crypto Scam Losses

March 2025 saw a dramatic reduction in crypto scam losses, with the total amount falling to $28.8 million—down from the staggering $1.5 billion recorded in February, largely driven by the Bybit hack. This steep decline suggests that security measures may be improving, or that cyber attackers are finding fewer vulnerabilities to exploit.

According to blockchain security firm CertiK, the majority of losses in March were caused by code vulnerabilities, which accounted for over $14 million in damages. Additionally, wallet compromises resulted in the theft of more than $8 million.

While this drop is encouraging, March still witnessed some significant exploits, including a $13 million smart contract breach on the decentralized lending protocol Abracadabra.money. This breach, which occurred on March 25, exposed vulnerabilities within the smart contract code, allowing an attacker to repeatedly borrow funds without repaying them, eventually draining the system.

Causes of the Decline in Scams

The sharp decrease in scam losses could be attributed to various factors, including improvements in security measures and fewer exploitable weaknesses in crypto platforms. However, breaches continue to occur, often due to flaws in smart contract protocols.

CertiK’s report highlighted that the most notable exploit in March involved an attacker manipulating the liquidation process in the Abracadabra.money protocol. By exploiting an error in the RouterOrder record system, the attacker could falsely borrow additional funds after liquidating their own positions.

Another breach involved the restaking protocol Zoth, where over $8.4 million was stolen after the deployer’s wallet was compromised. While some funds were recovered through a bug bounty agreement, the total losses for the month surpassed $33 million.

Additionally, phishing scams and spoofed crypto exchanges resulted in an estimated $46 million in potential losses, further emphasizing the ongoing security risks in the crypto space.

The Regulatory Shift Under the Trump Administration

While crypto scams and breaches remain a major concern, there’s hope that regulatory changes could provide a clearer path forward. Under the Biden administration, the focus on stringent regulations has raised concerns among industry participants. However, with Paul Atkins, nominated by President Trump as the SEC Chair, promising to create a more balanced and “coherent” regulatory framework, there’s potential for positive change.

Atkins has pledged to work with other commissioners and Congress to provide a rational, principled regulatory foundation for digital assets. His approach aims to ensure that security protocols are firmly established, potentially reducing the frequency of scams and security breaches in the crypto ecosystem.

Conclusion

While March 2025 saw a significant reduction in the losses from crypto scams, with a 98% drop compared to February, vulnerabilities in smart contracts continue to pose a significant threat. The ongoing breaches, alongside phishing scams and wallet compromises, underscore the need for stronger security measures. However, with a shift toward a more coherent regulatory framework under the Trump administration, the crypto industry could see long-term improvements that further reduce the risks of scams and hacks.