Wall Street’s trillion-dollar dilemma: Why AI-powered hackers are keeping big banks off the blockchain

§ 01 Executive Snapshot

• What: Traditional financial institutions face barriers in moving assets on-chain due to security risks from AI-powered hacking.
• Who: CertiK CEO Ronghui Gu, traditional financial institutions, and various DeFi protocols.
• Why it matters: The reluctance of banks to adopt blockchain technology could hinder the integration of trillions of dollars into decentralized finance, impacting the future landscape of financial markets.

§ 02 Key Developments

• April was the worst month for DeFi in four years with hacks occurring on 27 out of 30 days, primarily driven by AI.
• The Bybit hack in February 2025 resulted in $1.46 billion stolen, marking it as the largest hack in history.
• Over $1.1 billion has been lost to DeFi hacks in the past year, highlighting systemic vulnerabilities in the sector.

§ 03 Strategic Context

• Traditional financial institutions are exploring on-chain asset migration, envisioning movement of trillions over the next decade, but are deterred by security vulnerabilities.
• The rise of AI-driven attacks has created a significant imbalance between well-funded hackers and under-resourced protocol defenders, threatening institutional adoption of blockchain.

§ 04 Strategic Implications

• Immediate implications include a slowdown in institutional adoption of blockchain technology due to security concerns, potentially limiting the growth of DeFi.
• Long-term operational implications may lead to enhanced security measures and innovations in blockchain technology as institutions seek to mitigate risks.

§ 05 Risks & Constraints

• Regulatory and technical roadblocks stem from the pervasive threat of AI-driven hacks, which could hinder the secure implementation of on-chain assets.
• Competition from highly funded malicious actors exploiting vulnerabilities poses a significant challenge for protocol defenders, limiting their effectiveness.

§ 06 Watchlist / Forward Signals

• Institutions' timelines for on-chain asset migration will be influenced by developments in security technology and the regulatory landscape.
• Future trends in hacking frequency and methods, especially involving AI, will signal the readiness of the market for broader blockchain adoption.