DeFi Security Crisis Deters Institutional Investment

JPMorgan analysts have sounded the alarm on DeFi's security crisis, citing recurring breaches and weak capital growth as major barriers to institutional investment.

The report, led by managing director Nikolaos Panigirtzoglou, highlighted the recent Kelp DAO exploit as a prime example. The attack erased an estimated $20 billion from DeFi total value locked within days, with losses extending beyond platforms directly exposed to the compromised asset.

LaywerZero and independent blockchain security researchers have attributed the attack to North Korea's Lazarus Group, with some stolen funds frozen but others continuing to move through wallets and privacy protocols.

The analysts noted that total hack losses across the crypto sector this year are running at a similar pace to 2025. While smart contract auditing has improved, cross-chain bridge security remains a high-risk area.