Crypto does not fail quietly. It fails loud, fast, and permanent. In 2025 alone, $3.4 billion vanished through hacks, with North Korean operators pulling $2.02 billion while executing fewer attacks with sharper aim. Since tracking began, the cumulative tab hit $6.75 billion. Sandy Carter, COO at Unstoppable Domains and Forbes Digital Assets contributor, laid the numbers on the table on January 14, 2026. No panic, no theater, just math that makes insurers flinch and institutions hesitate.
The problem is not detection. The problem is finality. Once a valid transaction hits the chain, the door locks behind it. Traditional security watches the break in slow motion, then writes the report. Insurance steps in afterward and shrugs at the word irreversible. That gap is where confidence goes to die and where capital waits on the sidelines, checking its watch.
Circuit Security was born in New York in October 2023 after Harry Donnelly stopped listening to what the industry said it needed and started hearing what it was bleeding from. The insight was simple and brutal. Securing keys was not enough. Assets themselves needed a way out. So Circuit built recovery into the transaction layer, not the paperwork. When something goes wrong, the circuit closes, power reroutes, and value moves before finality sets in.
On the same day Sandy Carter’s analysis went live, Circuit launched Circuit Response. Sub two seconds. Pre authorized fallback transactions. Automatic broadcast before confirmation hardens. Bitcoin, Ethereum, live networks, no pause button required. This was not a demo timed to headlines. It was a response timed to physics.
Lloyd’s of London noticed. Completion of Lloyd’s Lab. Backing from the Central Fund. Participation from syndicates that do not chase novelty. When the oldest insurance market in the world starts leaning in, it is not curiosity. It is calibration. Institutions deploying Circuit Response may qualify for insurance premium reductions of up to 15 percent, not as a perk but as a pricing signal that risk can finally be contained, not just counted.
Early adopters like Tungsten and Palisade moved first to meet MiCA requirements, embedding recoverability where regulators demand proof, not promises. With $4.5 million in seed funding led by Nyca Partners and backing from Soma Capital, New Form Capital, Silicon Badia, Druid Ventures, and strategic angels from Fireblocks, Galaxy Digital, and Ripple, Circuit is building infrastructure for a market where $3.31 trillion in crypto assets sit mostly uninsured and mostly unacceptable to serious balance sheets.
Tom Gillingham, VP Growth and Strategy, saw the limits of key based recovery up close at CoinCover. At Circuit, the approach is different. Do not chase the thief. Shorten the window. Close the circuit. Make loss a scenario, not a sentence.
