Crypto wallet hacks are on the rise, with billions stolen from users through exposed seed phrases, malware, and fake wallet updates. This article explains how attacks happen and how users can protect their assets.
Jan 30, 2026
Have you ever heard the term, “Not your keys, not your crypto?” Well, once your seed phrase has been revealed, it can be a matter of seconds before your wallet is drained. Some users realize this already, but to others, this can come as a shock.
Just in the first half of 2025, TRM reported that $2.1 billion was stolen from users. This is more than the entire year of 2024 combined and is said to be the most in the history of crypto since 2022. Even then, it was not as much as it is now.
Technology is advancing, and so is the way users get hacked. So hold on to those phrases, and let’s discuss the problems at hand.
Hint: it’s not the blockchain. Blockchains are designed to be transparent without giving the hackers, such as the Lazarus Group, any of the specifics needed to hack your wallet. They record all transactions, but never reveal your seed phrases or anything of the sort — so where are the weak points?
Exposing seed phrases, devices being infected with malware, and compromised coding within wallet software. This is where users are actually getting hacked.
Going back to “Not your keys, not your crypto,” using certain wallet types can help you gain control of your keys and your crypto. Self-custodial wallets give you both without ever worrying about threats or attacks, as you are in control of the seed phrase. It does not get stored on a server, which has its pros and cons.
Keep them close and keep them hidden. Once hackers get hold of your seed phrase, there is no need for them to figure out your passwords — they now have access to all your assets. Taking screenshots of them, putting them in your notes app, or storing them in your phone’s password manager is not the way to go. This is where you may think it is safe, but once your device is hacked, so is your wallet.
Oh, and those pop-up ads that say they can help you recover your wallet — yeah, don’t even think about falling for that. These are all ways you weaken the security of your seed phrase and are basically asking to get hacked. Making sure that you write it down and store it safely away, or use tools such as metal storage devices, helps prevent this from becoming an issue.
While having the convenience of using a wallet on your browser when playing at a crypto casino, there are costs that come along with it. These wallets have frequent updates — but are all updates real?
Many hackers take this opportunity to produce fake updates or clones with malicious coding to hack into your wallet and drain it. This is why, for many users, keeping a very small amount in their hot wallet for daily use is best practice. If you want to properly store the majority of your assets, it should be done using a cold or hardware wallet.
Along with these scary updates, your device is always prone to receiving malware. This causes issues when you use browser extensions, as malware can infiltrate those extensions and, inevitably, your wallet..
As discussed previously, malware can cause a number of issues, often operating in the shadows. The goal of this software is to find your seed phrase and gain access to your entire wallet. It does not care who you are or what you are going through in life — it will steal, and the loss will be permanent.
Malicious software often embeds itself in legitimate programs to infect them and insert code that makes decisions for the user behind their back without raising any flags. Not only can it inject code, but it can also take real-time screenshots of whatever data is displayed on your screen. You know those seed phrases being generated by browser wallets? Yes — those can be captured and stored by hackers.
Many times, malware sneaks onto your device through pirated software. Others come from unrealistic casino promotions and bonuses that seem too good to be true — yet people try them anyway. Again, don’t even think about it.
Hackers specifically target crypto casino players. Think of it like scam callers who typically target older generations for gift cards — but much worse. Crypto players have predictable patterns when it comes to their funds: they deposit, play, and then withdraw.
This gives hackers clear points to time their attacks. They lurk in the shadows, waiting for players to hit big jackpots or make large withdrawals. That is when they strike.
When this happens, do not rely on the casino’s help. There is a clear line between casino account security and wallet security. Casinos cannot help or reverse on-chain theft, leaving victims with no support. Customer service does not have a magical wand to fix the theft, and once it has happened, there is nothing you can do.
While this is a heavy topic, users need to understand the hard truth about crypto attacks. So what can be done?
For starters, stop clicking on scam links. Jokes aside, one good practice is using separate wallets — one for gambling and another for securely storing your crypto. That way, if your gambling wallet gets compromised, hackers only gain access to a disposable amount.
Another important habit is moving large winnings out of your hot wallet as quickly as possible. This reduces exposure and helps maintain basic device hygiene. Keeping your device up to date and running antivirus software can significantly lower risk.
When it comes to gambling with crypto, keeping your wallet secure is the most important factor. Playing at crypto casinos can be a gamble in itself, but your wallet’s security should not be.
Most losses caused by hacking are preventable, but remember — nine times out of ten, they are not reversible. There will always be a trade-off between freedom and protection, but staying informed helps players reclaim both.
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