AI-Powered Heists Expose DeFi's Cross-Chain Vulnerabilities

Hackers drained $5.5 million from Garden Finance, a cross-chain yield protocol, in a sophisticated cyberattack that exploited vulnerabilities across multiple blockchain networks, according to blockchain investigator ZachXBT. The breach, which occurred on October 30, 2025, marks the latest in a series of high-profile DeFi exploits this year, underscoring persistent weaknesses in multi-chain systems. Attackers swiftly converted stolen assets into Ethereum (ETH), complicating recovery efforts. Garden Finance's team has offered a 10% white-hat bounty to the perpetrator in hopes of retrieving the funds but has not yet issued a formal public statement.

The heist aligns with a broader trend of AI-driven attacks in 2025, as state-sponsored groups like North Korea's Lazarus Group leverage artificial intelligence to automate and scale crypto crimes, according to a Coinpedia report. These AI tools enable rapid reconnaissance of smart contracts, identify exploitable code, and execute cross-chain thefts with near-machine precision. The $1.5 billion Bybit hack in February 2025, attributed to Lazarus, demonstrated how AI accelerates the attack lifecycle—from infiltration to laundering—while evading traditional security measures, the Coinpedia piece noted.

Industry experts warn that while quantum computing poses a long-term threat to blockchain security, the immediate risk stems from adaptive AI models outpacing conventional defenses. This is echoed by a WhiteBIT report that found 40.8% of 2025 security incidents involved social engineering scams, such as fake investment offers and impersonation tactics. "The majority of threats target human behavior," WhiteBIT's compliance team noted, emphasizing the need for proactive security measures like two-factor authentication and URL verification.

The DeFi sector's rapid expansion has exacerbated these risks. 1kx's H1 2025 report projects $19.8 billion in onchain fees for the year, driven by DeFi protocols accounting for 63% of total fees. However, as blockchain transaction costs have plummeted due to scaling solutions, application-layer vulnerabilities—such as those exploited in the Garden Finance hack—have become more lucrative for attackers, the 1kx analysis adds.

Regulatory and technological responses are intensifying. Wallarm's Q3 2025 report highlights a 270% surge in microservices composition (MCP) risks, as attackers shift from code-level exploits to business logic flaws. Meanwhile, Standard Chartered forecasts $2 trillion in tokenized real-world assets (RWAs) by 2028, a market that could attract further cyberattacks as DeFi challenges traditional finance. The bank warns that regulatory uncertainty remains a key barrier to RWA adoption, though it views stablecoin-driven liquidity as a catalyst for DeFi growth.

As cross-chain systems become more complex, the need for robust verification standards grows urgent. The Garden Finance incident, alongside the $300 million Coinbase hack earlier this month, highlights systemic vulnerabilities in decentralized infrastructure. For now, the industry's focus remains on AI-powered defenses and user education to mitigate the evolving threat landscape.