Crypto Fraud Drops 98% in March Amid New Regulations
Key Takeaways
In March 2025, losses from crypto fraud dropped dramatically—from $1.5 billion in February to just $28.8 million. This represents a 98% decrease. This development suggests improved security measures or fewer successful attacks. However, vulnerabilities remain, particularly in smart contracts, which continue to pose significant risks. A prominent example is an attack on the DeFi protocol Abracadabra.money, in which $13 million was stolen.
Significant Decline in Crypto Fraud Cases
Compared to the previous month, there was a massive drop in damages from crypto fraud, hacks, and exploits. While February 2025 was still marked by the Bybit hack with losses in the billions, losses in March fell to $28.8 million. These figures come from blockchain security firm CertiK.
The causes for this decline are varied. On the one hand, improved security measures in protocols and wallets may have played a role. On the other hand, it’s possible that attackers are currently finding fewer vulnerabilities or are shifting their focus to other targets.
Smart Contracts Remain a Weak Point
Despite the overall decline in losses, one area remains particularly vulnerable: smart contracts. On March 25, 2025, the DeFi protocol Abracadabra.money was the target of an attack. The damage amounted to approximately $13 million.
The attacker exploited a vulnerability in the liquidation process. By repeatedly borrowing and simultaneously liquidating their own positions, they were able to extract additional funds. The flaw was that the system failed to properly update certain data—a classic weakness in smart contract logic.
Other Incidents in March
Other platforms were also affected in March. The restaking protocol Zoth lost $8.4 million after the deployer’s wallet access was compromised. A portion of the funds—around $5 million—was recovered through a bug bounty agreement with the decentralized exchange 1inch.
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In addition, a loss of 400 Bitcoin (approx. $34 million) was reported by an unidentified Coinbase user. Phishing attacks and fake crypto exchanges may have caused another $46 million in potential damages.
Regulation in Focus Under New U.S. Administration
The current U.S. administration under Donald Trump is showing a different stance toward the crypto industry. With Paul Atkins as the new chair of the Securities and Exchange Commission (SEC), a clearer and more practical regulatory approach is being pursued.
Atkins announced plans to create a “rational and coherent” framework for digital assets. The goal is to better protect investors while not stifling innovation. This regulatory clarity could help reduce fraud and security issues in the long term.
Our Assessment
The drastic drop in losses due to crypto fraud in March 2025 is a positive sign. It shows that security measures are having an effect and that attackers are facing more difficulties. However, the industry remains vulnerable—particularly due to weaknesses in smart contracts and human error such as phishing.
For you as a user, this means: stay vigilant, use security measures like two-factor authentication, and only work with trusted platforms. The announced regulation in the U.S. could lead to greater long-term stability—even internationally.
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