The risk of hacking of exchange platforms and DeFi protocols is no longer a “residual operational risk”: it has become a systematic pricing factor for any crypto exposure, whether on-balance-sheet, collateral-based, or as a market maker. The cumulative losses from the 24 major incidents recorded between June 2011 and October 2026 amount to approximately 10.945 billion USD, including 6.3 billion USD for the single Binance episode of October 2026. The extreme concentration of the distribution tail, the Bybit episode of February 2025 alone accounted for 44% of the losses in 2025 and 32% of the cumulative losses for 2024–2025, invalidates any classical mean-variance approach.
