Report: Q2 2026 Becomes Worst Quarter Ever for Crypto Hacks

According to a recent report from crypto market tracker CryptoRank, DeFi platforms suffered 121 hacks in the first half of 2026, resulting in approximately $942 million in losses. The second quarter alone accounted for 85 incidents and about $775 million stolen, making it the most active period ever for exploits in the crypto sector.

The surge in attacks comes amid a struggling crypto market and weakening investor confidence. Total value locked (TVL) in DeFi protocols has fallen every month this year, dropping from about $115 billion in January to $70 billion in late June.

Drift Protocol and KelpDAO exploits were major contributors to Q2 losses. CryptoRank noted that Q2 2026’s 85 incidents are 49 more than the second-highest frequency period, Q1 2026. However, total dollar-denominated losses were not as high as previous peaks. Two back-to-back attacks in April accounted for the majority of Q2 losses.

Drift Protocol and KelpDAO lost a combined $590 million, more than half of all DeFi losses in 2026. Drift Protocol reported $285 million stolen, with TRM Labs linking the attack to North Korean hacking outfits. According to TRM, preparations began on-chain as early as March 11 with a 10 ETH withdrawal from Tornado Cash, following months of in-person meetings with Drift employees.

“The attacker used social engineering to induce Drift Security Council multisig signers into pre-signing transactions that appeared routine but carried hidden authorizations for critical admin actions,” TRM wrote on April 30.

Just over two weeks later, North Korea’s Lazarus Group exploited KelpDAO’s LayerZero bridge infrastructure, stealing roughly $290 million worth of rsETH. Chainalysis noted that attackers forged a cross-chain message on April 18 after compromising two remote procedure call nodes used by LayerZero’s Decentralized Verifier Network. They also launched a DDoS attack on a third node, forcing the system to use compromised verifiers. The verification process allowed the creation of rsETH tokens on Ethereum without burning corresponding assets on Unichain.

Following the attack, Aave’s TVL dropped from $26.4 billion to $14.3 billion, a decline of about 46%.

CryptoRank’s data shows DeFi TVL fell every month in 2026, from $115.3 billion in January to just over $70 billion in June. While hacks were not the main reason, the frequency likely reduced user confidence, leading to wider rotation away from the sector. However, the drop has been slower than the 2021-2022 cycle, when DeFi TVL tanked more than 70% in seven months. CryptoQuant notes the market is structurally different now, with stablecoin supply growing to about $300 billion, real-world asset tokenization expanding, and capital dispersed across derivatives, infrastructure, and lending.

Among the largest ecosystems by TVL, only Tron and Hyperliquid grew this year, gaining 5% and nearly 7% respectively. The rest of the top 10 chains are deeply in the red, with Plasma and Arbitrum seeing TVL plunge by 74.6% and 55% respectively.

Source: https://cryptopotato.com/report-q2-2026-becomes-worst-quarter-ever-for-crypto-hacks/