The fast-paced world of cryptocurrency and decentralised finance (DeFi) has brought innovation, disruption, and complex cybersecurity risks. With billions of dollars transacted across blockchain platforms, malicious actors are increasingly targeting decentralised ecosystems—exploiting vulnerabilities in smart contracts, digital wallets, and third-party integrations.
In this context, traditional penetration testing is no longer sufficient. These assessments often identify known weaknesses but may fall short when it comes to simulating advanced, multi-stage attacks. Red teaming addresses this gap by emulating real-world adversaries to test a company’s detection and response capabilities under pressure.
As 2025 unfolds, more crypto firms—especially those operating across DeFi, exchanges, and Web3 projects—are turning to red team exercises as part of their proactive security strategy. In this article, we explore why red teaming is gaining momentum in the blockchain industry, how it differs from standard security testing, and what techniques and trends are defining its future.
Red teaming is a form of advanced security assessment where a dedicated group of ethical hackers simulates real-world cyber attacks to test an organisation’s resilience. Unlike conventional penetration testing, which aims to identify technical vulnerabilities in a system or application, red teaming focuses on broader objectives: bypassing security controls, exploiting weak processes, and evaluating how well a company detects and responds to active threats.
In the context of crypto companies, red teaming is particularly valuable. Blockchain platforms are complex ecosystems involving smart contracts, decentralised storage, APIs, wallets, and user interfaces—all of which can be targeted by attackers. Red teams simulate multi-layered campaigns that mimic what a skilled adversary might attempt: from phishing key employees, to exploiting unpatched nodes, to draining smart contract funds.
While both penetration testing and red teaming aim to strengthen cybersecurity, their goals, scope, and methods differ significantly.
Here’s a side-by-side comparison to highlight the distinctions:
| Feature | Penetration Testing | Red Teaming |
|---|---|---|
| Objective | Identify vulnerabilities | Simulate real-world attacks |
| Scope | Narrow, usually defined systems | Broad, across people, processes, and technology |
| Approach | Known vulnerabilities and configurations | Unpredictable, creative, and stealthy |
| Duration | Short-term (1–2 weeks) | Longer-term (weeks to months) |
| Focus | Technical flaws | Detection, response, and defence readiness |
| Team Knowledge | White-box or grey-box | Black-box (no internal knowledge) |
| Outcome | List of findings and recommendations | Narrative of attack paths, evasion tactics, and response gaps |
Crypto companies benefit from combining both approaches—using penetration testing to fix obvious vulnerabilities, and red teaming to test the strength of their overall security posture under simulated, high-pressure scenarios.
In recent years, the crypto sector has witnessed some of the most devastating cyber attacks in history—breaches that not only led to massive financial losses but also shook investor confidence in decentralised technologies. One of the most notable examples is the 2022 Ronin Network hack, where attackers exploited compromised private keys to gain control over validator nodes. The result? A loss of over US$600 million, primarily in user funds.
Not long after, the Wormhole bridge exploit in early 2022 led to approximately US$320 million being stolen through a vulnerability in smart contract validation logic. These attacks were not limited to code-level flaws—they were indicative of broader weaknesses in security architecture, access control, and incident response preparedness.
These events served as a wake-up call, exposing the fact that point-in-time audits and conventional penetration tests alone were insufficient to prevent determined adversaries.
Most blockchain firms have historically relied on periodic security audits and penetration tests as part of their compliance routines. While essential, these assessments often follow predictable patterns and fail to replicate the tactics, techniques, and procedures (TTPs) used by real-world threat actors.
In today’s decentralised environments—where multiple smart contracts, wallets, APIs, and oracles interact dynamically—attack paths are no longer linear. Exploits often emerge from the way components interact, rather than from isolated code issues. Red teaming is designed to expose precisely this kind of systemic risk.
By 2025, a growing number of crypto-native companies, DeFi protocols, and NFT marketplaces are incorporating red team operations into their ongoing security programmes. This reflects a maturing understanding of the threat landscape: attackers will not wait for a vulnerability report—they will exploit what they can, when they can.
As a result, budgets are shifting away from one-off audits toward continuous simulation, adversarial testing, and real-time detection readiness. Red teaming has become not just a defensive practice, but a strategic investment in cyber resilience.
Red teaming in the blockchain space requires a distinct set of tactics, tools, and mindsets. Unlike traditional environments, blockchain systems are decentralised, immutable, and often involve open-source code, which gives both attackers and defenders more visibility—but also more opportunities for exploitation.
A skilled red team must understand not just how smart contracts work, but how users, developers, and third-party services interact with the blockchain. The following are common techniques red teams use when targeting crypto infrastructure in 2025:
Smart contracts are often the most visible and vulnerable layer in a blockchain ecosystem. Red teams look for logic errors, flawed access controls, and unchecked external calls. Insecure fallback functions, reentrancy issues, integer overflows, and improper validation of input parameters remain top targets. Unlike black-box attacks, red teamers may combine open-source intelligence (OSINT) with fuzzing tools to simulate realistic attacks on contract behaviour.
Wallets, whether custodial or non-custodial, are prime targets. Red teams test everything from insecure browser extensions and leaked seed phrases to backend infrastructure vulnerabilities in custodial platforms. Attack simulations may include phishing campaigns designed to steal private keys, social engineering of key employees, or even endpoint compromise to capture signing operations in real-time.
Crypto companies are often start-ups or remote-first teams with less mature security cultures. Red teams simulate phishing attacks, impersonate service providers, or attempt to exploit overshared credentials in public code repositories. By breaching a team member, attackers can often bypass even well-secured infrastructure.
The blockchain supply chain includes open-source dependencies, smart contract libraries, hardware wallets, and SaaS integrations. Red teams investigate backdoors in third-party code, malicious NPM packages, and weak CI/CD pipelines that may introduce vulnerabilities during development or deployment.
Despite its growing importance, red teaming in blockchain environments presents several unique challenges. From legal ambiguity to skill shortages and technical complexity, these factors must be considered when designing or executing a red team exercise.
One of the first and most critical challenges lies in the legal and ethical considerations. In traditional corporate networks, red team operations are typically executed within a controlled legal framework. However, in decentralised environments, particularly when targeting open blockchain networks or testing cross-border systems, the line between legitimate simulation and potential liability can become blurred.
For example, conducting social engineering exercises involving wallet providers or exchanges may conflict with data protection laws or local regulations. Red teams and their clients must ensure they have written scope-of-work agreements and legal oversight before initiating any simulated attack.
According to a detailed white paper by the SANS Institute, legal boundaries in red team engagements must be clearly defined to avoid liability and ensure ethical conduct.
Red team exercises are significantly more resource-intensive than penetration tests. While a typical pen test may last one or two weeks and cost a fixed amount, red teaming engagements can span months and require cross-disciplinary experts—blockchain engineers, offensive security professionals, and sometimes even behavioural analysts.
This often places red teaming beyond the reach of early-stage crypto startups, despite their high exposure to cyber threats. As a result, red teaming is currently more common among mid-sized to large crypto companies and exchanges.
Effective blockchain red teaming requires a rare combination of skills: deep knowledge of smart contract vulnerabilities, blockchain-specific threat modelling, and advanced offensive security techniques. These professionals are in high demand and short supply.
In many cases, companies must either rely on specialised third-party security firms or invest heavily in building in-house red team capabilities—a task that may take months, if not years.
As outlined by ConsenSys, working in blockchain security—particularly in red team operations—demands a combination of Web3-specific technical knowledge and traditional offensive security expertise.
Passive & active data gathering from on-chain and off-chain assets
Simulated attacks on smart contracts, wallets, APIs, and bridges
Maintain covert access to the environment without detection
Test the effectiveness of monitoring, alerting, and SOC response
Deliver detailed reports on findings, impact, and mitigation advice
As the blockchain ecosystem matures and cyber threats grow in sophistication, red teaming practices are also evolving. In 2025 and beyond, several key trends are shaping the future of offensive security for crypto companies—transforming red teaming from a one-off engagement into an ongoing, intelligence-driven process.
Traditionally, red team operations have been executed as periodic exercises—usually once or twice a year. However, the growing complexity of decentralised platforms and the speed of change in smart contract environments demand a more continuous approach. Emerging platforms now offer “Red Team-as-a-Service” (RTaaS) models, where simulated attack scenarios are run on an ongoing basis using automation, live threat feeds, and behavioural analytics.
This continuous red teaming strategy aligns more closely with the DevSecOps mindset—where security is embedded into every stage of development and deployment.
Another emerging trend is the integration of artificial intelligence (AI) and machine learning (ML) into red team operations. AI-powered tools can rapidly identify exploitable paths, simulate attacker behaviour, and even evolve over time based on the target’s defences.
In blockchain red teaming, AI can be used to:
While AI will not replace the creativity of experienced red teamers, it will significantly enhance their efficiency and scale.
Lastly, red teaming is being reframed from a purely technical function to a strategic business tool. Investors and stakeholders are increasingly demanding evidence of robust cyber resilience—especially from crypto companies handling sensitive assets. Executing regular red team operations can not only improve defences but also signal trustworthiness and maturity to regulators, partners, and users.
As threats evolve, companies that embrace adaptive, intelligence-led offensive security will be better positioned to stay ahead of adversaries.
Always-on simulations via Red Team-as-a-Service (RTaaS)
Embedding red teaming into CI/CD pipelines and agile workflows
Using machine learning for behavioural modelling and attack path discovery
Red teaming as a trust signal for stakeholders and regulators
As blockchain technologies continue to evolve, so too must the cybersecurity strategies that protect them. Red teaming offers a powerful way to evaluate not just vulnerabilities, but the entire security posture of an organisation—across people, processes, and infrastructure.
While smart contracts and decentralised systems introduce new risks, they also demand a higher standard of offensive security. Through simulated attacks and real-world scenarios, red team operations can uncover blind spots that audits alone may never detect.
Whether your organisation operates in the crypto space or simply wants to strengthen its defences against modern threat actors, now is the time to invest in proactive security.
Fort1 specialises in advanced penetration testing and red team simulations tailored to today’s evolving digital landscape. From blockchain environments to traditional enterprise networks, we help businesses uncover and address critical gaps before attackers do.
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