Crypto security experts warned that social engineering, rather than software vulnerabilities, has emerged as the primary cause of losses across the digital asset industry in 2025.
Industry data showed that most successful crypto attacks this year began with human interaction rather than technical exploits.
Nick Percoco, chief security officer at Kraken, said attackers increasingly rely on manipulation rather than hacking systems directly.
Attackers aren’t breaking in, they’re being invited in.
Nick Percoco said.
Blockchain analytics firm Chainalysis reported that more than $3.4 billion was stolen from the crypto sector between January and early December.
Nearly half of that total was linked to a major February breach at Bybit that relied on social engineering tactics.
Investigators said attackers used manipulated communications to inject malicious code and alter transaction details before siphoning funds.
Security professionals described social engineering as the practice of deceiving individuals into revealing sensitive information or approving harmful actions.
Percoco said the future battleground for crypto security lies in psychology rather than software architecture.
Security is no longer about building higher walls, it’s about training your mind to recognise manipulation.
Nick Percoco said.
He added that users should treat every unexpected message as a potential threat designed to provoke panic or urgency.
Supply chain vulnerabilities also emerged as a major risk during the year, with small breaches cascading into larger compromises.
Percoco recommended reducing human trust points by automating defences and verifying all digital interactions.
The future of crypto security will be shaped by smarter identity verification and AI-driven threat detection.
Nick Percoco said.
He warned that fear of missing out and greed continue to amplify human vulnerabilities in crypto markets.
Lisa, a security operations lead at SlowMist, said developer ecosystems were heavily targeted through cloud credential leaks.
Developers can mitigate these risks by pinning dependencies, verifying packages and isolating build environments.
Lisa said.
She predicted that AI-generated deepfakes and tailored phishing would become even more prevalent in 2026.
Lisa advised organisations to strengthen access controls, rotate keys frequently and deploy anomaly detection systems.
Individual users were urged to rely on hardware wallets and avoid unsolicited links or unverified files.
Steven Walbroehl, co-founder and chief technology officer at Halborn, said AI-enhanced impersonation has reshaped attacker capabilities.
Walbroehl cited multiple incidents where crypto founders narrowly avoided theft attempts involving deepfake video calls.
He recommended cryptographic proof-of-personhood and pre-shared verification protocols for sensitive communications.
Physical attacks on crypto holders, known as wrench attacks, also increased sharply during 2025.
At least 65 such attacks were recorded this year, nearly double the total seen during the 2021 bull market peak.
Former intelligence officer Beau said crypto users should avoid publicly discussing wealth or holdings online.
He advised becoming a “hard target” by removing personal data from public databases and strengthening home security.
Security expert David Schwed said users should prioritise reputable platforms with rigorous third-party audits.
Security hinges on the interaction layer, and users must remain hyper vigilant when signing transactions.
David Schwed said.
Experts agreed that no legitimate service will ever request seed phrases or login credentials.
Percoco concluded that radical scepticism remains the most effective defence against increasingly sophisticated crypto scams.