In the cryptocurrency market, there is no end to the massive losses caused by security breaches. In a Coindesk article dated June 17, 2026, expert Mr. Beyer warned that this situation will continue unless the current audit infrastructure is updated.This is because traditional auditing methods are unable to fully address the complex risks inherent in the rapidly evolving cryptocurrency ecosystem. This observation suggests that a fundamental reevaluation of security measures is essential as new areas such as DeFi (decentralized finance) and NFTs (non-fungible tokens) continue to expand.This article aims to delve deeper into why standard audits are insufficient and what measures will be required going forward, with the goal of helping Japanese working professionals interested in crypto gain a deeper understanding of this critical issue. The sound development of crypto assets requires not only technological evolution but also the strengthening of the security frameworks that underpin them.Investors must carefully evaluate a project’s security measures and implement thorough risk management. This issue is not limited to individual companies or projects; it is an urgent challenge that the entire industry must address.
The Current State of Security in the Crypto Asset Market
The cryptocurrency market has experienced rapid growth in recent years. The emergence of DeFi (Decentralized Finance: a system for conducting financial transactions on the blockchain without intermediaries such as banks or securities firms) and NFTs (Non-Fungible Tokens: digital data with unique identity and scarcity on the blockchain) has significantly expanded its scope of use.
However, at the same time, security issues are occurring with increasing frequency. Incidents resulting in the loss of large sums of money due to hacking, fraud, and attacks exploiting protocol vulnerabilities continue to occur. These incidents are undermining the credibility of the market as a whole.
In particular, the increasing complexity of smart contracts (contract programs that execute automatically on the blockchain) tends to create a breeding ground for new vulnerabilities. The rapid pace of development also makes it more difficult to implement security measures.
Investors must remain constantly aware of these risks and make efforts to gather information. A project’s security framework is one of the key factors in investment decisions.
Limitations of Traditional Auditing Methods
Code audits (the process of inspecting programs for vulnerabilities) have long been widely used as a security measure for cryptocurrency projects. This involves experts reviewing smart contract code to identify potential bugs and vulnerabilities.
However, as Mr. Beyer points out, situations are arising where traditional audits alone are insufficient. The main reason for this is the rapid evolution of blockchain technology. New protocols and features are emerging one after another, causing the scope of audits to continue expanding.
Furthermore, an audit is merely a snapshot at a specific point in time. If the code is modified or new features are added after an audit, new vulnerabilities may arise in those modified sections. Continuous monitoring and updates are essential.
Furthermore, human code reviews have their limitations. The code for complex smart contracts is vast, making it extremely difficult to perfectly identify all potential issues.
Why Are Standard Audits Insufficient?
The cryptocurrency ecosystem has characteristics that differ from traditional IT systems. Once deployed, smart contracts cannot, in principle, be modified. This immutability makes it more difficult to respond to security incidents.
Attackers are also constantly developing new methods. Sophisticated attacks are on the rise, such as flash loan attacks (attacks that instantly borrow massive amounts of funds without collateral to manipulate the market) and oracle manipulation (fraudulent manipulation when importing external data into the blockchain).
Traditional audits primarily consist of checks based on known vulnerability patterns. However, there are many cases where they are unable to fully address unknown vulnerabilities or the complex risks that arise when multiple protocols interact.
Mr. Beyer explains that unless the current audit infrastructure is updated, the crypto asset space is highly likely to continue suffering significant losses. This observation indicates that a fundamental transformation of the infrastructure—rather than merely superficial improvements—is required. Source
The Need to Update Audit Infrastructure
To ensure the security of cryptocurrencies, a fundamental overhaul of the audit infrastructure is essential. This involves both technical aspects and industry-wide collaboration.
First, the implementation of real-time monitoring—constantly monitoring systems to immediately detect anomalies—is crucial. Mechanisms are needed to detect code changes made after an audit and abnormal behavior in live protocols at an early stage.
In addition, the development of automated vulnerability detection tools utilizing AI (artificial intelligence) and machine learning is progressing. This will enable the efficient identification of patterns that humans tend to overlook and the detection of issues within vast amounts of code.
Furthermore, standardization of security standards across the industry is necessary. Establishing common guidelines and best practices can reduce variations in security levels between projects.
New Directions in Security Measures
In addition to updating audit infrastructure, the implementation of multi-layered security measures is considered crucial. One such measure is the use of bug bounty programs (systems that pay rewards to those who discover vulnerabilities).
By having security researchers and hackers from around the world search for and report vulnerabilities in a project, development teams can fix these issues. This is an effective way to actively incorporate external insights.
Furthermore, formal verification (a method for mathematically proving the correctness of a program) is gaining attention. This involves using rigorous mathematical methods to verify that smart contracts operate as intended. Although it is a highly advanced technology, its adoption is progressing among major protocols.
Furthermore, strengthening on-chain security features—such as multisig (a mechanism where transactions are not executed unless approved by multiple signers) and time locks (a mechanism that prevents funds from being transferred until a certain period has elapsed)—is also an effective measure.
Points for Investors to Consider
When considering an investment in cryptocurrencies, investors must carefully evaluate a project’s security measures. Check the whitepaper and official documentation to see what audits the project has undergone and what security measures it has implemented.
It is also crucial to thoroughly practice DYOR (Do Your Own Research). It is advisable to consider whether the project has a history of security incidents and its reputation within the community.
Rather than judging security based on a single audit result, investors should adopt a multi-faceted approach, evaluating the project from multiple sources. It is essential to stay abreast of the latest security trends and acquire the knowledge necessary to protect your assets.
The cryptocurrency market holds great potential for growth, but it also carries significant risks. Be sure to gather information carefully and manage risks prudently.
[Source: Original Article]
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