Crypto’s Security Blind Spot: Why One Smart Contract Update Can Undo Everything
In the fast-moving world of crypto, a single silent update to a smart contract can unravel months of security efforts. Yet, many projects still treat security audits more like shiny badges than the critical safety checks they should be.
That’s the concern raised by Hacken, a leading blockchain security firm, whose analysts warn that billions in crypto assets are being left exposed due to outdated and insufficient security practices. In a recent exclusive with crypto.news, Hacken CEO Dyma Budorin pulled no punches: most crypto firms don’t even meet the Cryptocurrency Security Standard (CCSS) baseline.
“Audits shouldn’t be treated as a checkbox or a logo on your homepage,” Budorin said. “Every audit becomes outdated the moment a contract is changed.”
Static Audits Are a Dangerous Illusion
The common approach — auditing a snapshot of smart contract code before launch — is fundamentally flawed, according to Hacken. Code evolves. Ecosystems shift. One overlooked function or change can expose vulnerabilities overnight. Yet most projects lack mechanisms for continuous validation or automated re-audits.
“A single overlooked function can open the door to disaster. The real issue isn’t just audit coverage, it’s audit relevance.”
Hacken proposes a shift toward real-time monitoring, automated alerts, and revalidation systems that trigger re-audits upon any material change. Without this, projects may be lulled into a false sense of security — right up until it’s too late.
The Call for Smarter Launch Standards
No smart contract, Hacken argues, should go live without passing a strict, baseline set of automated security tests — including symbolic execution, fuzzing, and formal verification.
But the challenge doesn’t stop there. Many protocols fail to implement proper upgrade controls. Old contracts, even when known to be risky, often remain active. Hacken suggests protocols should:
- Encourage timely patching
- Disable or retire legacy contracts with known flaws
- Automate monitoring for unusual changes or behavior
Off-Chain Security: The Overlooked Risk
While on-chain code gets the spotlight, some of the worst crypto breaches happen off-chain. The infamous Bybit hack, which lost nearly $1.5 billion, wasn’t caused by a code bug. It was the result of compromised multisig credentials and poor operational security.
According to Dmytro Yasmanovych, Hacken’s Head of Compliance, many firms fail to implement basic off-chain protections outlined in the CCSS, such as:
- Hardware-backed multi-factor authentication
- Encrypted communication channels for sensitive actions
- Defined approval roles and thresholds for transactions
“Too many platforms neglect secure operational practices and leave themselves vulnerable to insider threats and credential leaks.”
Exit Scams Dressed as Innovation
Perhaps Hacken’s most scathing criticism was reserved for the LIBRA token — a memecoin that claimed innovation but ended in what they describe as a textbook rug pull. Insiders allegedly walked away with over $300 million, using hype-fueled price pumps to cash out.
“It wasn’t innovation. It was exit liquidity. And it destroys trust in the space,” said Budorin.
Hacken believes crypto should borrow lessons from traditional finance — namely, disclosure and oversight. This includes:
- Requiring disclosure of team holdings and planned token sales
- Transparent vesting schedules and tokenomics
- Independent monitoring platforms and watchdog alerts
The Bottom Line: Security Can’t Be an Afterthought
If crypto wants to evolve beyond speculation and become true financial infrastructure, security must be continuous, transparent, and ingrained at every layer — both on-chain and off.
Until the industry embraces this mindset, every smart contract update, insider transaction, or overlooked control will remain a potential catastrophe waiting to happen.
