Crypto hacks raise fresh concerns for Wall Street adoption

A string of high-profile crypto exploits is reshaping how institutions view risk in decentralized finance, even as blockchain adoption continues to expand across traditional markets.

The shift comes after major breaches earlier this month triggered billions in losses and exposed vulnerabilities in cross-chain infrastructure - a key pillar of the industry’s next growth phase.

As Wall Street evaluates its next move, industry experts are drawing a clearer line between speculative DeFi activity and the longer-term promise of tokenized finance.

Related: 'Lots of bombs' on hold: Markets rally as Trump extends ceasefire

Tokenization push remains intact despite setbacks

Speaking on the April 22 episode of The Wolf of All Streets podcast hosted by Scott Melker, crypto macro analyst Noelle Acheson said recent exploits are unlikely to derail institutional tokenization efforts.

“I totally agree with you that this is going to hurt the DeFi story,” Acheson said. “It’s not going to hurt the tokenization story at all.”

Her comments come after a report from Jefferies warned on April 21 that hacks such as the $293-million KelpDao exploit and the $280-million Drift Protocol breach could slow Wall Street’s blockchain ambitions.

Acheson argued that most institutional activity already takes place on permissioned blockchain systems, limiting direct exposure to DeFi-related risks.

Popular on TheStreet Roundtable:

• Solana surpasses Ethereum in weekly dApp revenue for 5th week
• Massive crypto hack triggers $9 billion panic withdrawal
• Jack Dorsey’s app launches interest-bearing accounts for kids

“Most of it is going on permission blockchains… it’s what their lawyers will let them do and their compliance departments will sign off on,” she said.

Still, she cautioned that the broader value of tokenization depends on its ability to interact with decentralized systems.

“What is the point of tokenization if you can’t interact with DeFi protocols?” 

Stablecoin scrutiny deepens 

The fallout from such exploits is now extending beyond DeFi protocols and into the infrastructure supporting them, particularly stablecoins.

A class-action lawsuit filed on April 14 against Circle Internet Group alleges the firm failed to freeze funds during the Drift Protocol hack, allowing attackers to move roughly $230 million across blockchains.

The case has intensified debate over whether stablecoin issuers should act as neutral intermediaries or take a more active role during security incidents.

Acheson said the situation could open “a whole new regulatory can of worms,” especially around expectations for intervention.

“If we don’t sort this out… that could keep large institutions away from stable coins period,” she said.

Circle has defended its approach, with chief strategy officer Dante Disparte stating the firm only freezes assets when legally required, framing such actions as compliance obligations tied to due process.

Related: Treasury Secretary says Fed can wait on rate cuts, even as he keeps pushing for them