Hacken warned that audit badges may give investors false confidence after crypto-related losses reached $1.18 billion across 107 incidents in the third quarter. According to NS3.AI, the losses were 55% higher than in the previous quarter.

Hacken attributed $906.8 million in losses to compromised suppliers or developer tools, publicly available security fixes that had not been installed, or components excluded from the latest security review. The company said audits may cover only specific smart contracts, leaving wallets, signing systems and third-party software outside their scope.

Hacken said companies that hold customer funds should track vulnerabilities and install fixes promptly rather than rely on outdated audits.