Abstract:"The Decentralized Finance (DeFi) ecosystem has experienced over $10 billion in direct losses due to crime events. Beyond these immediate losses, such events often trigger broader market reactions, including price declines, trading activity changes, and reductions in market capitalization. Decentralized Autonomous Organizations (DAOs) govern DeFi applications through tradable governance assets that function like corporate shares for voting and decision-making. Leveraging DeFi's granular trading data, we conduct an event study on 22 crime events between 2020 and 2022 to assess their economic impact on governance asset prices, trading volumes, and market capitalization. Using a dynamic difference-in-differences (DiD) framework with counterfactual governance assets, we aim for causal inference of intraday temporal effects. Our results show that 55% of crime events lead to significant negative price impacts, with an average decline of about 14 %. Additionally, 68% of crime events lead to increased governance asset trading volume. Based on these impacts, we estimate indirect economic losses of over $1.3 billion in DAO market capitalization, far exceeding direct victim costs and accounting for 74% of total losses. Our study provides valuable insights into how crime events shape market dynamics and affect DAOs. Moreover, our methodological approach is reproducible and applicable beyond DAOs, offering a framework to assess the indirect economic impact on other cryptoassets."