Crypto Hacking Surges: How Social Engineering Fuels $786M Thefts in 2025

Social Engineering: The Human Weak Link in Crypto Security

Michael Pearl, vice president of strategy at cybersecurity firm Cyvers, has firsthand experience with the growing threat of social engineering in crypto. At industry conferences, he’s been approached by suspicious individuals offering lucrative deals that seem too good to be true.

"A person approaches you telling you a story that is too good to be true — who wants to invest in your company, wants to buy your product, and then they send you a link that seems suspicious."

Social engineering is a tactic used by cybercriminals to manipulate victims into clicking malicious links or revealing sensitive information. It’s often the first step in digital attacks on crypto projects, exploiting human psychology rather than technical vulnerabilities.

High-Profile Hacks Linked to Social Engineering in 2025

Recent major crypto heists highlight the effectiveness of this approach:

• $1.5 billion Bybit hack (February 2025): Attackers exploited social engineering to breach the exchange.
• $282 million theft (January 2025): A single crypto holder fell victim to a sophisticated scam.
• Drift Protocol attack (April 2025): Hackers drained nearly $300 million from the Solana-based exchange after approaching its team at a conference.

Nation-State Hackers Leverage Social Engineering

The infamous North Korean hacking group, the Lazarus Group, is known for using LinkedIn and fake job advertisements to lure victims. Their tactics demonstrate how state-sponsored actors exploit trust to infiltrate crypto projects.

2025: A Record Year for Crypto Thefts

Cybercrime in the crypto space has escalated dramatically. According to DefiLlama, hackers stole over $2.5 billion in 2024. In the first four months of 2025 alone, they’ve made off with $786 million, according to the latest data.

DeFi and Centralized Exchanges: The New Battleground

While decentralized finance (DeFi) protocols were once the primary target, cybercriminals are now shifting focus. Centralized systems, including Coinbase—America’s largest crypto exchange—have become prime targets. However, DeFi is seeing a resurgence in attacks.

"Right now, DeFi seems to be the primary target. In general, everything has shifted now to hacking humans rather than hacking systems."

— Michael Pearl, Cyvers VP of Strategy

Why Are Social Engineering Attacks Rising?

Security experts attribute the surge to human error as the weakest link in cybersecurity. Matt Price, vice president of investigations at Elliptic, explains:

"The initial point of compromise often begins with people."

Artificial intelligence is further amplifying the threat by enabling hackers to refine their social engineering techniques, making scams more convincing and harder to detect.

The Bybit Hack: A Case Study in Human Exploitation

The largest crypto theft in history—$1.5 billion from Bybit—occurred after attackers posed as legitimate business partners. This underscores how even sophisticated organizations can fall victim to well-crafted social engineering schemes.

Industry Response and Future Risks

With social engineering attacks on the rise, crypto projects and exchanges are under pressure to enhance employee training and implement stricter verification protocols. However, as hackers refine their tactics, the battle against cybercrime remains an ongoing challenge.