State-enforced norm for every crypto user to submit all personal info is ‘incredibly dangerous’, says Cake Wallet VP

Losses from crypto hacks, scams, and exploits surged to $2.47 billion in the first half of 2025, according to blockchain security firm CertiK.

The overall number is up nearly 3% from the $2.4 billion recorded in all of 2024

CertiK’s latest quarterly report noted that just over $800 million was lost in the second quarter across 144 incidents—a 52% drop in value and 59 fewer incidents compared to the previous quarter.

Adjusting for recoveries of more than $187 million in the first six months, the net loss figure stands closer to $2.2 billion.

As privacy concerns mount and attack vectors evolve, tools aimed at safeguarding user anonymity are gaining traction.

We spoke with Seth for Privacy, Vice President at Cake Wallet, to understand the growing concerns in the broader crypto community around the breaches and the possible solutions that can be deployed.

Here are the excerpts from the interview.

Invezz: Security incidents in Web3 continue to cost hundreds of millions each quarter. The first half of the year saw some major breaches. In your opinion, what are some of the major causes behind these massive breaches?

The two biggest causes by far are users trusting custodians with their crypto (i.e. crypto exchanges and lending providers), with very few security incidents involving users who take custody of their own keys.

Those few incidents that do involve self-custody are almost always caused by users either flaunting their wealth on social media or having their information stolen from centralized exchanges in breaches of Know-Your-Customer (“KYC”) data.

The crypto community has also seen a wave of adoption globally. Do you think such breaches can impact the broader market adoption of Web3?

They absolutely can, as the risks that come with the “Wild West” of crypto will certainly scare some people off the concept in general.

But this Wild West nature cuts both ways, as it’s also empowering millions of individuals to have more financial freedom than ever before.

Invezz: What emerging threats concern you most — is it AI-powered attacks, vulnerabilities in modular chains, physical attacks, or something else that isn’t getting enough attention?

Physical attacks against high-profile individuals and those affected by KYC database leaks are by far the most concerning at the moment, as they seem to be drastically increasing in number.

The norm enforced by the state of every crypto user having to submit all of their personal information, photos, and videos of themselves, and much more, just to buy and sell crypto is incredibly dangerous, and that danger is starting to become a reality for people across the globe.

Invezz: What are some of the steps that the community can take to tackle these growing challenges?

The most critical two are taking custody of your own keys (keeping that 12-word seed phrase safe!), avoiding giving over personal information to centralized exchanges whenever possible to avoid being affected by KYC data breaches, and not talking publicly about your crypto holdings or usage, especially on social media.

Invezz: How do Silent Payments and PayJoin help ensure security, and what were the reasons behind employing these at CakeWallet?

Both Silent Payments and Payjoin help to protect users against surveillance when making everyday payments or accepting donations with Bitcoin, ensuring that the merchant they buy coffee from or the snooping bad actor can’t easily see how much Bitcoin they hold at a glance.

Combining off-chain privacy (avoiding KYC data breaches and being smart about who you tell about your usage of crypto) with on-chain privacy (using tools like Silent Payments and Payjoin in Cake Wallet) protects you from all but the most advanced threats.

Invezz: What are some of the other updates you plan on bringing to ensure further user safety?

The biggest update planned right now for Cake Wallet is much broader and drastically improved hardware wallet support, allowing users to gain even stronger security for their crypto while still being able to enjoy the ease of use and privacy features in Cake Wallet on the go.

We think this brings the best of both worlds to the user, and can’t wait to roll out improved hardware wallet support over the coming weeks and months.

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