TLDR
- Banking executives said decentralized finance cannot attract institutions until persistent security breaches are resolved.
- CertiK reported breaches on 27 out of 30 days in April, calling it DeFi’s worst month in four years.
- Drift Protocol and Kelp Dao lost nearly $600 million in exploits linked to North Korean cybercriminals.
- Societe Generale Forge issued regulated stablecoins to complete onchain cash settlement for tokenized assets.
- Institutional clients prefer regulated banks and custodians over open-source non-custodial DeFi platforms.
Decentralized finance has drawn renewed scrutiny after banking executives said its future depends on fixing security flaws and core infrastructure gaps.
At the Proof of Talk conference in Paris, asset managers and bank leaders said blockchain can support back-office banking tasks, but weak onchain security still blocks wider adoption. Several panelists stressed that traditional institutions will not move large volumes of capital onto networks vulnerable to repeated hacks.
During the event, CertiK CEO Ronghui Gu cited April data showing breaches on 27 out of 30 days. Gu described the period as the worst month for DeFi security in four years. He referred to attacks on Drift Protocol and Kelp Dao, where North Korean cybercriminals drained nearly $600 million combined.
Bridge Flaws Stall Institutional DeFi Adoption
Maja Vujinovic, CEO of investment advisory firm OGroup, said unresolved hacks remain the main barrier to growth. Vujinovic told the audience she does not expect meaningful expansion beyond dedicated DeFi traders until bridge vulnerabilities are fixed. She argued that problems in cross-chain infrastructure must be solved before banks commit capital.
Ben Nadereski, co-founder and CEO of Solana-based yield protocol Solstice, shared a similar view in an interview with CoinDesk. Nadereski said frequent exploits have limited user trust and slowed protocol growth. He blamed developers for focusing on innovation while overlooking core duties tied to safeguarding deposited funds.
Elsewhere on the panel, Stéphanie Cabossioras, chief strategy and global policy officer at Société Générale Forge, described how her institution addressed structural weaknesses. She said the bank has tokenized structured products and green bonds on public blockchains.
Cabossioras explained that SG-Forge faced a practical issue because only the securities side operated onchain. Without a digital cash layer, settlements could not complete fully on blockchain networks. To resolve this, she said the bank issued regulated stablecoins, including EURCV and USDCV.
Custody and Trust Remain Central
Cabossioras stated that institutional clients prefer regulated banks over open-source, non-custodial protocols. She said clients value delegating asset protection to supervised entities rather than managing private wallets themselves.
In her remarks, she maintained that custodians and banks will continue to serve a role in digital finance. According to Cabossioras, businesses and individuals still seek trusted intermediaries for asset security and compliance needs.
Panelists agreed that blockchain technology can support financial plumbing, yet they said long-term credibility depends on stronger safeguards and regulated settlement tools.
