Security firm Blockaid analysed 60 crypto protocol exploits between 5 January and 5 August, with total losses of $1.18 billion. Only $9.8 million, about 0.8%, was returned, while $81.4 million was frozen. Almost all recoveries came from action by the protocol itself, its governance or validators, while issuer blacklists recovered nothing. In 16 cases a blacklist was available but never activated, and the median time before stolen funds moved was 17 minutes.

What it means: Stablecoin issuers such as Tether and Circle can freeze addresses, and that ability is often presented as a safety net after an exploit. The study shows that in practice it does not work as a recovery tool. The main reason is time: attackers move funds within minutes, often swapping them into other tokens or bridging them to other chains, while issuers need a request, verification and often a legal basis before freezing. That recoveries came almost entirely from protocols themselves shows security has to be built into the code: pause mechanisms, withdrawal limits, real-time monitoring. Note that Blockaid sells exactly that kind of monitoring tool, so the conclusion fits its business model. The figures are nonetheless striking and raise questions about regulators' expectations. The GENIUS Act and MiCA require issuers to be able to freeze tokens for compliance, but that is mainly about sanctions and money laundering, not fast incident response. For users and businesses, the message is that funds lost in DeFi rarely come back.

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