Institutional Investors Change Criteria for Crypto Project Evaluation

Institutional investors are no longer relying solely on smart contract audits to assess the safety of crypto projects; instead, actual 'operational security' has emerged as a more important criterion. According to Hacken's "Q2 2026 Security and Compliance Report," only 9% of the 1,427 projects surveyed have implemented third-party monitoring, and just 4% have operated active bug bounties and security audits. Of the approximately $76.4 million in damages incurred during the same quarter, 88.3% stemmed from private key leaks, signer vulnerabilities, and infrastructure weaknesses. The criteria for institutional judgment are changing, with significant considerations now including changes in signer composition, collateral structure, third-party dependencies, and incident response systems. Federico Bagiotti from Abracax Capital noted that insufficient security acts as a signal for exclusion from investment. Hacken reported that 14 projects that suffered hacking incidents in Q2 had previously undergone audits, but actual losses occurred in areas outside the audit scope. This report illustrates that security is becoming a determining factor for 'investability' in the crypto market.

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