Cryptocurrency has always been lauded as the financial digital saviour. A digital monetary system that can be utilised by the unbanked.
A space where digital transactions can be made without middlemen, secure in the knowledge that the holder has full control over their financial security.
However, recently, a series of major hacks and other security flaws have seen the value of crypto fall considerably, and the reputation of the cryptocurrency industry as a whole has been put under the microscope.
In this article, we ask the question, if cryptocurrency has a credibility problem? And if so, what, if anything, can be done about it?
Here goes…
Binance Security Breach
Recently, on October 29th 2026, one of the world’s largest crypto exchanges, Binance, was hacked in the largest crypto attack ever.
The attack saw over $6.3 billion drained from a single wallet controlled by Binance (the Binance 14 wallet).
The weak point of the attack? A single developer’s laptop had been compromised, allowing attackers to request withdrawal signatures.
Over half of the hacked assets were immediately frozen (around $3 billion); however, the fact that a major exchange could be compromised via a single laptop is simply incomprehensible.
If this happened in traditional finance, it would probably lead to the collapse of said financial institution or at least some leadership heads rolling in the aftermath.
But in the crypto world, nothing seems to happen; assets are frozen, in this case, but not always; funds are returned to users, and the issues over time are forgotten about. But are they really?
Is confidence also being drained away from the crypto industry, not just the digital assets from frustrated customer wallets?
Coldcard Wallet Breach
The Binance breach saw assets drained from a major centralised exchange.
Many experienced crypto holders are aware of the dangers of holding large quantities of digital currency on centralised exchanges. The mantra has always been “not your keys, not your crypto”.
This means that if you don’t hold the seed phrases to your assets, you essentially do not have control over them. Therefore, it is highly recommended that users hold their crypto in ‘cold storage’.
Cold storage is a system where crypto assets are held offline, in a secure hardware wallet where no attacker can get to it. Only the user has the seed phrase and only they can access it.
That was the thinking until the Coldcard wallet breach, which saw $70 million of Bitcoin drained from hardware wallets.
The cause of the attack? The seed phrase generating software originally created by the Coldcard software developers had a flaw that generated seed phrases that were not completely random.
This allowed an attacker to run through a series of seed phrase permutations that allowed access to hardware wallets that, although not directly connected to the internet, were available for access via the blockchain.
Therefore, by guessing the seed phrases, the hardware wallets could be drained by the attacker.
This attack left thousands of victims, many of whom will probably not see the return of their assets. Law firm Fieldfisher is looking at this high-value crypto case in the United Kingdom. There is also a class action lawsuit against Coinkite (Coldcard creators) in Canada.
What’s shocking about this case is that users did everything right. They kept away from centralised exchanges, stored their assets offline away from online access, and they still got hacked.
Worst still, they were not immediately compensated for their losses by the wallet provider.
Cardano Wallet Breach
So, centralised exchanges are not immune to hacks; hardware “cold” wallets can be potentially flawed, but what about “hot” wallets?
Hot wallets are entirely software-based digital wallets that are easy for the user to control. They are often run in the user’s browser, on a laptop or on a mobile phone.
Hot wallets have always been considered less secure than cold wallets, mainly because they are designed so that a connection to the internet is required to store assets.
The main advantage of a hot wallet is that as long as you keep your seed phrases private, there is little to no chance that an attacker could drain your wallet without access to your keys.
Well, that’s the theory anyway. In April 2026, a new hot wallet SecondFi, on the Cardano blockchain saw $2.8 million drained from user wallets.
The SecondFi wallet was lauded as the successor to an established and secure Cardano wallet provider, Yoroi. The software upgrade forced users to upgrade to SecondFi, and a flaw in the SecondFi software saw users’ private keys broadcast on the blockchain.
The attackers did not need access to users’ private keys; every transaction signed by users broadcast those keys on the blockchain, allowing the attackers to drain those affected wallets.
SecondFi was subsequently closed down in the aftermath; however, they did offer some compensation to the victims.
While this attack was relatively small in comparison to the others mentioned in this article, it does show that crypto holders are at risk across all asset storage mediums.
Crypto exchanges, hardware cold wallets and browser-based software hot wallets are all potentially vulnerable.
Does Crypto Have a Credibility Problem?
The short answer is simply yes. Without a robust compensation scheme and systems in place where attackers can be found and users compensated, public trust will be lost every time a major hack takes place.
Furthermore, increased software developer scrutiny needs to be in place to ensure that some of these security loopholes are not deliberate insider attacks or simply unacceptable developer error.
The rise of AI is likely to see less-skilled attackers entering the frame seeking to drain user wallets too.
The counterproductive ‘get rich quick’ mindset of many crypto investors and development teams also needs to change. This behaviour leads to project hype and speculative price movements that do nothing to help crypto credibility.
The crypto industry as a whole needs to adapt to these threats and place user security at the centre of its operations.
While the ethos of crypto is that every holder is responsible for their own wallet and keys, if the wallets themselves are flawed, someone needs to be held accountable.
At least in the Binance and Cardano cases mentioned in this article, users are being compensated; however, this is not always the case.
These software flaws point to the fact that cryptocurrency is still in the very early stages of development, and as such, mass adoption is unlikely to take place until public trust and safety measures can be put in place to protect user funds.
Unfortunately, until such measures are put in place, crypto credibility is likely to take a hit. The crypto industry as a whole needs to realise that protecting users and compensating after an attack is not the same as preventing the hack in the first place.
Until crypto firms and developers act to place user protection at the forefront, mass adoption is unlikely to take place.
Read this article on crypto mass adoption:
What Entrepreneurs Must Know
While cryptocurrency does have its risks. Entrepreneurs should be aware that the fundamental benefits of crypto still hold true.
The potential for faster and cheaper international payments. A means for everyone worldwide to have access to alternative ‘banking’ facilities simply with a mobile phone or internet access.
A decentralised solution that is less dependent on the traditional banking systems.
Simplified international business payments and innovation in the areas of tokenised assets, loans, investments and financial assets.
All these areas are prime for significant development through crypto.
However, while the technology itself offers all these great possibilities, without public trust and confidence, the potential will be hard to bring to reality.
Entrepreneurs should understand that crypto is still in the early stages of development, and as such, is highly volatile and speculative.
Add to that the potential for software hacks and breaches, those considering entering the crypto world should do so with their eyes firmly open, and understand that they risk losing most, if not all, of their investment.
The reality is that no matter how careful you are, it is likely you will lose out to overnight price drops, hacks or security flaws at some point.
However, despite the issues, the potential upsides are huge. Entrepreneurs who are brave enough to participate should be cautious and not go ‘all in’ on any potential investment and only put in what they are prepared to lose.
Final Thoughts
While the potential cryptocurrency benefits remain unchanged, including low-cost worldwide money transfer, tokenised assets, simplified business transactions and decentralised financial instruments, it cannot be denied that there are considerable risks in holding cryptocurrency, no matter the storage medium.
Recent hacks show that all asset storage mediums are vulnerable and entrepreneurs should be careful not to store large quantities of crypto assets across a single storage medium.
This means that, in reality, it can be argued that cryptocurrency does indeed have a credibility problem. Every hack and software breach drains away trust and public confidence in the technology despite all its potential benefits.
In addition, the ‘get rich quick’ mindset of some crypto projects and developers also adds to the negative perception.
Therefore, until the crypto industry as a whole puts user security and safety at the centre of its operations, it will be difficult for crypto to gain mass adoption.
This does not mean cryptocurrency is not a viable investment vehicle; it just means that savvy entrepreneurs need to be cautious and ensure that they spread their risks across multiple storage mediums and ensure they do not go ‘all in’ on any single investment.
The crypto industry is still in its very early stages, and as the industry develops, many of the security issues should be overcome and systems put in place to protect users.
Until then, entrepreneurs should do everything necessary to keep their assets safe and secure in the meantime.
Good luck!
Read this article on how to protect yourself from crypto hacks:
New to crypto? Read this article on Bitcoin, Ethereum and Cardano:
***Disclaimer: This article is not financial advice and is given for informational and entertainment purposes only. Readers should conduct their own research and not invest more than they can afford to lose. Crypto is extremely volatile, and as such can drop in value considerably without notice. Pop Up World has a global presence and is not specifically targeting any jurisdiction with its content. Any crypto references are not intended for UK businesses or consumers. You should always seek legal advice to understand if the use or investment in crypto is allowed in your jurisdiction.
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***Disclaimer: This article is not financial advice and is given for informational and entertainment purposes only. Readers should conduct their own research and not invest more than they can afford to lose. Crypto is extremely volatile, and as such can drop in value considerably without notice. Pop Up World has a global presence and is not specifically targeting any jurisdiction with its content. Any crypto references are not intended for UK businesses or consumers. You should always seek legal advice to understand if the use or investment in crypto is allowed in your jurisdiction.
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