What is Trust Wallet?
Trust Wallet is a decentralized wallet launched in 2017 and acquired by a centralized exchange the following year. Its main goal is to provide users with full control over their funds by securely storing private keys on their devices. As an all-in-one crypto wallet, Trust Wallet supports over 10 million digital assets, including Bitcoin, Ethereum, Binance Smart Chain tokens, Solana, and thousands of other cryptocurrencies across over 100 blockchain networks, serving as an entry point to the Web3 ecosystem. Beyond storing digital assets, it also allows you to interact with decentralized applications, collect and trade NFTs, and even earn rewards by staking cryptocurrencies.
What Happened in the Security Breach?
On Thursday, December 25, Trust Wallet faced a security issue that resulted in a loss of approximately $7 million. In a statement, the crypto wallet service, which does not offer multi-chain storage, said the issue affected version 2.68. According to the Chrome Web Store listing, the extension has approximately one million users. Users are advised to update to version 2.69 as soon as possible.
Statement from the Team:
Trust Wallet stated in a post on X, “We have confirmed that approximately $7 million was affected, and we will ensure that all affected users are reimbursed.” “Supporting affected users is our priority, and we are actively completing the reimbursement process for affected users.” The team also urges users to avoid interacting with messages that do not come from official channels. Only mobile users and all other browser extension versions are not affected by this situation. The company added that this could be the work of a nation-state actor, suggesting that the attackers may have gained control of Trust Wallet-related developer devices or obtained distribution permissions before December 8, 2025. Changpeng Zhao, co-founder of Binance, the crypto exchange that owns the service, implied that the attack was “most likely” carried out by an insider. However, no other evidence was presented to support this theory.
Trust Wallet, in a subsequent update, called on affected users to fill out a form at the support desk at “trustwallet-support.freshdesk[.]com” to initiate the compensation process. Victims were asked to provide their contact email addresses, country of residence, compromised wallet addresses, the address to which funds were transferred ( ), and the relevant transaction hashes. The company warned, “We are seeing cases of fraud via Telegram ads, fake ‘compensation’ forms, fake support accounts, and DMs.” “Always verify links, never share your recovery phrase, and only use official Trust Wallet channels.” Trust Wallet CEO Eowyn Chen reiterated that the investigation into the incident is ongoing, and that the issue only affected users of the Chrome browser extension version 2.68 who logged in before December 26, 2025, 11:00 UTC. Chen also said, “The malicious extension v2.68 was not released through our internal manual process.” “Our current findings indicate that this extension was most likely released externally via the Chrome Web Store API key, bypassing our standard release controls.”
Technical Details:
According to other details shared by SlowMist, version 2.68 contained malicious code designed to iterate through all wallets stored in the extension and trigger a mnemonic phrase request for each wallet. The blockchain security company stated, “The encrypted mnemonic is decrypted using the password or passkeyPassword entered when unlocking the wallet.” “Once decrypted, the mnemonic phrase is sent to the attacker’s server api.metrics-trustwallet[.]com.” The domain name “metrics-trustwallet[.]com” was registered on December 8, 2025, and the first request to the address “api.metrics-trustwallet[.]com” began on December 21, 2025. Further analysis revealed that the attacker used an open-source full-chain analysis library called posthog-js to collect wallet user information. “The attacker directly tampered with the application’s own code. They then used the legitimate PostHog analytics library as a data exfiltration channel and redirected analytics traffic to a server under the attacker’s control.”
The stolen digital assets so far include approximately $3 million in Bitcoin, $431 in Solana, and over $3 million in Ethereum. The stolen funds were transferred via centralized exchanges and cross-chain bridges for laundering and exchange. “While approximately $2.8 million of the stolen funds remained in the hackers’ wallets (Bitcoin/EVM/Solana), a large portion, over $4 million in cryptocurrency, was sent to CEXs (centralized exchanges). It was determined that $3.3 million was sent to ChangeNOW, $340,000 to FixedFloat, and $447,000 to KuCoin. SlowMist also stated, “This backdoor incident stemmed from malicious source code changes in the Trust Wallet extension’s internal code base (analytics logic), rather than injected compromised third-party dependencies (e.g., malicious npm package).”
Why Is Trust Wallet’s Compensation Commitment Important?
Trust Wallet’s decision to cover all losses could be a turning point for cryptocurrency security practices.
User Protection Priority: By assuming financial responsibility, Trust Wallet prioritizes user security over profit concerns.
Setting Industry Standards: This move is compelling other wallet providers to strengthen security and accountability measures.
Strengthening Trust: Despite Trust Wallet being hacked, the compensation commitment actually strengthens users’ trust in the platform.
Compliance with Legal Regulations: This proactive approach aligns with growing legal expectations for consumer protection in cryptocurrencies.
How Does This Affect the Future of Cryptocurrency Security?
The hacking of Trust Wallet offers valuable lessons for the entire cryptocurrency ecosystem. First, this incident demonstrates that even established and reputable platforms can face security issues. Second, it shows that responsible companies can turn security incidents into opportunities to build trust through transparent communication and financial accountability. However, the Trust Wallet breach serves as a warning for the crypto industry. It highlights existing security vulnerabilities in wallet software and the urgent need for advanced security protocols. As the crypto world evolves, users must remain vigilant about the risks associated with digital wallets and the importance of protecting their assets. This incident has also sparked discussions about potential regulatory changes that could emerge in response to such breaches. Regulators may propose stricter security standards for wallet providers. These standards could include mandatory secure software development practices, incident reporting obligations, and minimum security standards for handling cryptographic keys.
For users, this incident reinforces several important practices:
- Using hardware wallets is perhaps the most effective approach. These wallets store private keys offline and significantly reduce the likelihood of malware attacks.
- Two-factor authentication (2FA) is another requirement. Enabling this feature provides an additional layer of security, which is especially important if login credentials are compromised.
- Regular software updates are also crucial. Keeping wallet software and devices up to date can help eliminate security vulnerabilities that attackers could exploit.
- Users should also be cautious when installing browser extensions. It is recommended to only install extensions from trusted sources and to regularly review installed extensions, removing those that are no longer necessary.
- Finally, being aware of phishing attacks can also help users avoid fraud. It is very important to verify the authenticity of communications and links before providing sensitive information.
The hacking of Trust Wallet and the subsequent compensation announcement provide important insights into the maturing cryptocurrency world. While the incident itself is concerning, the response sets a positive precedent for how crypto companies should handle security breaches. The results of the investigation will lead to the creation of enhanced security protocols that will benefit all Trust Wallet users and potentially influence industry-wide standards. Furthermore, this situation highlights the importance of choosing platforms with strong backing and established reputations. Trust Wallet’s connection to Binance provided users with both the resources and incentive to compensate for their losses. However, this may not be the case with smaller, independent wallet providers.
Additional Security Measures:
- Implementing robust Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) frameworks is crucial to meet legal requirements and enhance security.
- Adopting advanced cybersecurity measures is also recommended. AI threat detection and private key management can help identify and mitigate potential threats before they escalate.
- Startups should comply with the guidelines of regulatory bodies such as the Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) to maintain security standards.
- Improving software development practices is essential. Secure software development practices, including code reviews, vulnerability assessments, and incident response planning, should be adopted.
- Educating users on security best practices is also recommended. Providing resources on wallet security, phishing attacks, and secure practices can help users effectively protect their assets.
- Using a Zero Trust architecture can also be beneficial. This model ensures that all users and devices are authenticated before accessing sensitive data or systems.
- By adopting these recommendations, fintech startups can significantly improve their security posture and increase trust with users. In doing so, they can contribute to a more secure cryptocurrency ecosystem.
Conclusion
The Trust Wallet hack incident highlighted security vulnerabilities in the decentralized finance space and evolving liability frameworks. The Trust Wallet hack compensation decision represents more than just damage control. It signals a fundamental shift toward greater accountability in cryptocurrency services. By prioritizing user protection over short-term financial considerations, Trust Wallet and Binance demonstrated leadership that could reshape industry expectations. While security incidents remain a concern, this transparent and user-centric response offers a model for how crypto companies can maintain trust amid challenging circumstances.
Disclaimer
This content is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments involve risk. Always do your own research and verify information through official sources.
