On-chain Insurance Decreases by 20.2%, Hacking Losses Increase by $3.63 Billion

Crypto hacking losses have surged to $3.63 billion, while the active coverage of on-chain insurance has decreased by 20.2%. From January 2025 to July 2026, losses on crypto platforms totaled 245 incidents, with active on-chain insurance coverage dropping from $163.2 million to $130.2 million during the same period. The top 10 attacks accounted for 72.5% of the total stolen amount, with losses from infrastructure and supply chain vulnerabilities exceeding $1.8 billion. The causes of these losses vary, including private key theft from centralized exchanges and smart contract exploits in decentralized applications. On-chain insurance provides coverage for specific incidents, but actual incidents often fall outside this scope. As of August 2026, five out of nine on-chain insurance protocols have been deactivated, with total payouts amounting to only $33 million. The crypto insurance market is facing a conflict of interest between users seeking coverage against hacking losses and capital providers considering the scale and frequency of incidents. The Bank for International Settlements has pointed out the ambiguity in coverage and pricing issues of cyber insurance as market constraints. In the long term, the global crypto insurance market is projected to grow to $13.8 billion by 2026 and $192.7 billion by 2033.

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