Bybit Security Advisory: Browser Extension Wallet Risks Highlight Need for Institutional-Grade Custody Solutions

As 2025 concludes with staggering losses exceeding $713 million from browser extension wallet exploits, the cryptocurrency industry faces a pivotal security reckoning. These always-on hot wallets, operating within browsers—one of computing's most hostile environments—have exposed systemic vulnerabilities that standard user security practices cannot overcome. Attackers are increasingly targeting design flaws in these extensions, turning convenient access points into massive liabilities for personal asset holders. This alarming trend underscores a critical divergence between retail-facing tools and the institutional-grade security infrastructure required for serious digital asset protection. For platforms like Bybit and professional traders, this serves as a stark validation of multi-layered security architectures, cold storage solutions, and regulated custody frameworks that keep assets isolated from browser-based threats. The incident reinforces why exchange-based security, with advanced withdrawal protections, multi-signature protocols, and dedicated custody environments, remains essential for safeguarding substantial portfolios against evolving attack vectors that exploit the very convenience users demand.

Browser Extension Vulnerabilities Expose Crypto Wallets to $713M in Thefts in 2025

Cryptocurrency wallets built as browser extensions have become a critical vulnerability in digital asset security, with attackers exploiting design flaws to steal $713 million from personal wallets in 2025 alone. The industry's reliance on these always-on hot wallets, operating in one of computing's most hostile environments, has led to systemic risks that users cannot mitigate through standard security practices.

Trust Wallet's Chrome extension breach in December exemplified the threat, where a malicious update (version 2.68) exfiltrated wallet data and drained $7 million before detection. The auto-updating nature of browser extensions allowed the compromised version to spread unchecked for days, affecting even security-conscious users who followed all standard self-custody protocols.

MetaMask documented similar threats, including a counterfeit "Safery: ethereum Wallet" extension that remained in Chrome's official store for nearly two months. These attacks target the browser layer rather than blockchain infrastructure, bypassing traditional security measures.

Chainalysis data reveals a dramatic shift in attack vectors, with personal wallet compromises accounting for 44% of thefts in 2024 and 20% ($713 million) in 2025. The figures WOULD have reached 37% of total thefts without the massive Bybit exchange hack skewing the percentages.

Crypto Hacks Decline by Half in 2025, But Losses Surge to Systemic Levels

The cryptocurrency industry saw a dramatic shift in security threats in 2025, with the number of hacks dropping by half but total losses skyrocketing to nearly $3 billion. The defining event of the year was the $1.46 billion theft from Bybit, a top-tier centralized exchange, attributed to sophisticated state-sponsored actors.

Data from SlowMist reveals approximately 200 security incidents in 2025, down from 410 the previous year. Yet, total losses climbed to $2.935 billion, up from $2.013 billion in 2024. The average loss per event more than doubled, from $5 million to nearly $15 million, as attackers targeted DEEP liquidity pools and high-value centralized exchanges.

The Bybit heist, which exploited the exchange's Ethereum cold wallet, underscored the growing sophistication of threats. While decentralized finance exploits and protocol failures declined, the industry now faces industrial-scale attacks with systemic implications.