Crypto Security Crisis Deepens as January 2026 Losses Exceed $400 Million

The crypto industry faced an alarming escalation in security threats in January 2026, as phishing attacks, social engineering scams, and treasury breaches pushed total losses beyond $400 million. According to data from blockchain security firm CertiK, at least 40 separate security incidents resulted in losses of approximately $370.3 million, a figure that rises to over $400.3 million when factoring in a late-month exploit involving Solana-based analytics platform Step Finance.

Rather than sophisticated smart contract exploits dominating the month, CertiK noted that user-targeted social engineering attacks were the primary driver of losses. The most severe incident occurred on January 16, when a single investor lost $284 million in a highly coordinated phishing scam. Attackers impersonated Trezor customer support and tricked the victim into revealing a recovery seed phrase, leading to the immediate theft of 1,459 Bitcoin and 2.05 million Litecoin. This single phishing attack accounted for roughly 71% of the month’s adjusted total crypto losses.

Following the theft, the attacker rapidly converted a large portion of the stolen assets into Monero (XMR), a privacy-focused cryptocurrency designed to obscure transaction histories. The scale of this conversion contributed to a notable surge in Monero’s market price, highlighting ongoing regulatory challenges around privacy coins, illicit fund movement, and crypto money laundering.

Despite the dominance of phishing-related losses, technical vulnerabilities remained a significant issue. Blockchain verification firm Truebit reported a $26.6 million loss caused by an overflow vulnerability, marking January’s largest direct smart contract exploit. Other notable DeFi attacks included Swapnet, which lost $13 million, as well as Saga and Makina Finance, which suffered losses of $6.2 million and $4.2 million respectively.

The Step Finance breach on January 31 involved draining multiple treasury and fee wallets using a well-known attack vector, resulting in the movement of 261,854 SOL. As the crypto industry moves into February, January’s events serve as a stark reminder that even advanced hardware wallet security can be rendered ineffective when user-level defenses fail, underscoring the urgent need for stronger crypto security awareness and phishing prevention.