An analysis of cyberattacks shows that the funds stolen directly account for only about a quarter of the total damage. The far greater losses arise from subsequent price declines.
[Vienna, 01 December, 2025] – In the crypto world, reports of cyberattacks tend to focus mainly on the funds that vanish immediately. A new study by researchers at the Complexity Science Hub (CSH) now shows that the indirect consequences – such as falling token prices and eroding trust – can multiply the financial impact of such attacks, with investors bearing the brunt.
OVER A BILLION IN INDIRECT LOSSES
“We examined 22 major cyberattacks in the crypto sector between 2020 and 2022. In 12 of those cases, the affected tokens experienced subsequent price crashes. While the direct damage in these twelve cases amounted to around 454 million US dollars, the indirect losses due to declining token values reached 1.3 billion US dollars,” explains study author Stefan Kitzler from CSH. On average, the affected tokens lost 14 percent of their value after an attack. In addition, trading volume increased in roughly 68 percent of the cases "as many investors traded actively, either selling quickly to limit losses or buying because they sensed an opportunity for future profits," Kitzler says.
“Reactions to cyberattacks in the DeFi sector closely resemble how traditional financial markets respond to scandals and security incidents – however, on average, we observe larger declines on the one hand, but also counterintuitive price increases on the other,” adds Bernhard Haslhofer, who leads the Digital Currency Ecosystems research group at the CSH.
ISOLATING THE EFFECTS OF ATTACKS
The researchers analyzed price movements 24 hours before and 48 hours after an attack. They also compared the price movements with those of other tokens that had previously performed similarly to ensure that the observed price changes were actually due to the cyberattack and did not reflect general market trends.
Price development during the time window of the cyberattack: The researchers calculate the price change of an organization's governance tokens compared to similar assets in six-hour intervals.
NO LONGER A NICHE
Decentralized finance, or DeFi, enables financial transactions with cryptocurrencies directly on the internet – without banks, brokers, or centralized institutions. The technology is built on blockchain, a public digital ledger that transparently records all transactions.
This market for decentralized financial services – such as buying, trading, or lending crypto assets – has seen strong and steady growth. “In Austria, for instance, estimates suggest that at least 300,000 people have invested in crypto. It is therefore no longer a niche,” says Haslhofer. At the same time, the system is increasingly targeted by criminal attacks exploiting technical vulnerabilities, fraud, or market manipulation.
A PARALLEL TO THE ‘REAL’ FINANCIAL WORLD
The study focuses on the Ethereum network, currently the most important blockchain for DeFi applications. It examines attacks specifically targeting Decentralized Autonomous Organizations (DAOs) – digital communities in which investors use governance tokens to vote on key decisions, much like shareholders in a company.
“Because DAOs structurally resemble traditional organizations in the real economy, we selected them deliberately,” Kitzler notes. “We wanted to see whether the consequences of an attack on these digital organizations would mirror those observed in conventional financial systems,” adds Haslhofer.
Despite their technological decentralization, markets and investors respond to negative events in very similar ways. “Our analysis shows that the indirect losses resulting from eroded market confidence are often greater than the funds stolen outright,” Kitzler emphasizes. “This highlights the systemic nature of risks in DeFi: an attack affects not only the targeted organizations but the entire ecosystem – and ultimately its investors.”
DeFi projects cannot be viewed in isolation. For investors, developers, and regulators, this means that security, market stability, and trust are deeply interconnected – and must be protected together, the researchers conclude.
ABOUT THE STUDY
The study “The Economic Impact of DeFi Crime Events on Decentralized Autonomous Organizations (DAOs)” by S. Kitzler, M. Paquet-Clouston, and B. Haslhofer was published in The Journal of Finance and Data Science (doi: 10.1016/j.jfds.2025.100171).
ABOUT CSH
The Complexity Science Hub (CSH) is Europe’s research center for the study of complex systems. We derive meaning from data from a range of disciplines – economics, medicine, ecology, and the social sciences – as a basis for actionable solutions for a better world. CSH members are Austrian Institute of Technology (AIT), BOKU University, Central European University (CEU), Graz University of Technology, Interdisciplinary Transformation University Austria (IT:U), Medical University of Vienna, TU Wien, University of Continuing Education Krems, Vetmeduni Vienna, Vienna University of Economics and Business, and Austrian Economic Chambers (WKO).
