Social Engineering – Insurance Against The Biggest Threat to Crypto

What is Social Engineering?

Social engineering is the psychological manipulation of people into divulging confidential information or performing actions that compromise their security. Unlike technical hacks, social engineering attacks exploit human behavior—tricking individuals into revealing passwords, sending funds, or granting access to sensitive systems. In today’s digital world, these attacks are more sophisticated than ever, targeting everyone from everyday crypto users to high value investors.

The recent May 2025 social engineering attack on Coinbase is a stark reminder: even the industry’s biggest players are not immune. The consequences for individuals and businesses holding crypto can be catastrophic. As the old saying goes, “a fool and his money are soon parted,” but in 2025, it’s clear that even the smartest can fall victim. The crypto industry must do more to protect its community.

Is Social Engineering Crypto’s Biggest Threat?

When it comes to cryptocurrency, social engineering is by far the number one threat. Industry expert Chainalysis (2025) shows social engineering was the costliest attack vector in 2024, resulting in a staggering 84.4% of the $9.9 billion stolen. At time of report this figure was expected to increase to $12.4 billion of losses, therefore meaning social engineering would have been responsible for between $8.35 billion and $10.47 billion in 2024. It is terrifying that both education and technology combined, could do nothing to prevent 84% of all global crypto thefts that occured last year, underscoring the urgent need for new and innovative solutions that protect users and businesses against social engineering.

Media headlines often focus on dramatic exchange hacks or protocol exploits, such as the 2025 ByBit hack of $1.5 billion, while the more common social engineering scams often fly under the radar. In fact, social engineering hacks accounted for over 5x the value of the ByBit theft throughout 2024. As a result, many traditional finance apps and platforms have excluded crypto altogether, citing the dangers of social engineering and fraud. The message is clear: while blockchain technology is secure, the human element remains the weakest link.

How Can You Protect Yourself from Social Engineering Attacks?

Crypto Security Education

Education is always the first line of defense, but let’s be honest—how many people truly pay attention? Security best practices are often ignored, forgotten, or misunderstood. Even experienced crypto users can fall for a convincing phishing email or a scammer posing as a trusted contact. Social engineers are experts at persuading victims to ignore warnings, often by promising quick riches or exploiting urgency.

Security Tools and Technology

Technical solutions like two-factor authentication, wallet screening, and web3 security tools are helpful, but they’re not foolproof. Many users bypass security prompts or ignore warnings, and criminals are skilled at convincing victims to disregard these safeguards. Delayed payments on exchanges have been suggested, but in reality, users want speed—not friction.

Crypto Insurance – The Essential Safety Net

This is where insurance becomes essential. Unlike other solutions, insurance doesn’t depend on perfect user behavior. It provides a safety net, offering real financial protection when things go wrong. As the crypto industry matures, insurance is no longer just for exchanges and institutions—it’s vital for individual users too.

The Redefind Cryptoasset Theft Insurance Policy is the only global insurance contract that covers social engineering scams, as well as a wide range of other theft events, regardless of how your assets are stored. This is true peace of mind for anyone serious about crypto security.

Conclusion: The Only Robust Remedy for Social Engineering in Crypto

A combination of education, technology, and security tools is important, but the only truly robust remedy is insurance—specifically, Redefined insurance that understands the unique risks of crypto and social engineering. As threats evolve, so must your defenses. Don’t leave your crypto future to chance.

Take Action: Protect Your Crypto Assets Today

A number of leading exchanges and wallet providers are already integrating the Redefind cryptoasset theft insurance in order to protect their clients ahead of our full launch in July 2025. Don’t wait until it’s too late. Secure your digital assets with the only insurance policy designed to cover social engineering and crypto theft—Redefind Cryptoasset Theft Insurance. Visit Redefind now to learn more and get covered.