Crypto hacks and phishing have caused over $400 million in losses.
The co-founder of Ethereum, Vitalik Buterin, has suggested a strategic approach to strengthen security in the crypto industry, following a $400 million loss amid a spike in advanced phishing scams and treasury account breaches.
According to him, a suitable approach to security seeks to narrow the gap between what a user wants to do and how the system actually works. Buterin’s proposed approach prioritizes user needs through robust verification and built-in redundancy. To break this point down for better understanding, the industry executive shared an X post that integrates security into the user experience.
Moreover, he asserted that the gap between what a user wants to do and how the system actually works could be effectively reduced by utilizing a combination of type systems, formal verification, and even large language models.
When reporters reached out to the co-founder of Ethereum for clarity on the matter, he stressed that security and user experience are interconnected, not separate. To elaborate on this point, Buterin began by noting that both fields focus on reducing the gap between user intent and system performance. Afterwards, he highlighted that the primary distinction is that security addresses scenarios where gaps cause major problems.
Buterin adopts a strategic approach to enhance security in the crypto industry
Buterin’s suggestion comes at a time when reports note a sharp growth in challenges such as wallet hacks, smart contract vulnerabilities, and complicated privacy threats in the crypto industry. Even so, several developers have expressed excitement about the industry executive’s outlook on security, arguing that integrating security into the user experience offers a suitable approach for balancing safety with user convenience.
Meanwhile, Buterin pointed out that, “Perfect security is impossible — not because machines are imperfect or because the people who design them are flawed, but because understanding a user’s intent is incredibly complex.”
To further elaborate his argument, the Ethereum core innovator stressed that even a simple 1 ETH transfer relies on assumptions about identity, blockchain forks, and basic knowledge that code cannot fully cover. At this point, analysts noted that Buterin’s viewpoint prioritizes understanding human cognition over strictly technical solutions.
This finding prompted them to conduct research, during which they discovered that this issue mirrors initial debates on AI safety, in which establishing clear goals proved remarkably difficult. For the crypto ecosystem, converting human intent into computer code faces similar challenges. Therefore, according to the co-founder of Ethereum, redundancy is a suitable solution to curb this challenge.
At this particular moment, sources declared that robust security frameworks rely on users confirming their intent through multiple redundant channels, granting access only when these inputs align. This approach is common in many existing tools.
On the other hand, reports mentioned that programming type systems require developers to define both code functionality and data structure at each step. It is worth noting that formal verification incorporates mathematical rules into this process. Afterwards, users verify outcomes before finalising actions using transaction simulations.
In the meantime, sources highlighted that Buterin also explained the integration of large language models (LLMs) within this redundancy framework. Based on his argument, while general LLMs broadly mirror human common sense, specialised models are superior at capturing an individual’s specific behavioural patterns.
Analysts raise concerns about the surging losses in the crypto industry amid hacking incidents
While Buterin embraces strategic approaches to strengthen crypto security, data from blockchain security company CertiK showed a total loss of about $370.3 million across 40 incidents in the ecosystem.
At this point, analysts argued that the total loss exceeds $400.3 million, including the $30 million hack of a Solana-based platform, Step Finance. This incident took place on January 31, 2026.
To underscore the seriousness of the situation in the industry, reports dated January 16 stated that an anonymous investor suffered a significant loss of approximately $284 million due to a phishing attack targeting a hardware wallet. This theft represented about 71% of the month’s total adjusted losses. Moreover, 1,459 Bitcoin and 2.05 million Litecoin were stolen immediately following this incident.
