BNY Mellon Digital Asset Exec Urges Security After $8.5B Self-Custody Theft
Compromised private keys in self-custody wallets have led to $8.5 billion in stolen onchain assets, representing nearly half of all DeFi hacks over the past decade. David Schwed, COO of BNY Mellon’s digital asset unit, recommends hiring seasoned CISOs with three to five experts to build robust security systems.
1. Self-Custody Risk Scope
Over the past decade, compromises of private keys controlling self-custody wallets have accounted for $8.5 billion in stolen onchain assets, nearly half of all recorded DeFi hacks. This highlights the trade-off between user control and security vulnerabilities in decentralized finance.
2. Recent High-Profile DeFi Breaches
North Korean hackers exploited weak security systems to steal a combined $579 million from two DeFi projects, demonstrating how social engineering and compromised infrastructure providers can bypass code-level protections.
3. BNY Mellon’s Digital Asset Strategy
David Schwed, COO of BNY Mellon’s digital asset offerings, argues that institutions and projects must hire experienced chief information security officers and dedicated teams to design and enforce rigorous custody safeguards.
4. Budget and Speed Trade-Offs
Early-stage crypto projects often prioritize rapid market entry and cost reduction over security staffing, leaving them exposed. Schwed warns that allocating budget for skilled security personnel is essential to prevent future large-scale thefts.