Why Companies Struggle Against Social Engineering Attacks: An Analysis

In recent times, many significant cryptocurrency exploits have revealed a common underlying issue: human vulnerability. This article discusses the ongoing challenges companies face with social engineering attacks, the cybersecurity implications in the crypto space, and proposes enhancements in operational security to combat these threats.

Key Takeaways

Human Element: A significant portion of data breaches (around 60%) is attributed to social engineering tactics that exploit human trust and routine.
Risks in Crypto: Compromising sensitive information, such as seed phrases, poses high risks due to the irreversible nature of cryptocurrency transactions.
Need for Operational Security: Companies must prioritize operational security measures, including training employees to recognize phishing attempts and using robust security tools.
Growing Threat: The rise of generative AI has made social engineering attacks more sophisticated and widespread.
Defense Strategies: Organizations should adopt a zero-trust approach, enhancing verification processes and safeguarding where trust exists within their operations.

Social engineering will not disappear, but we can make it far less effective and far less catastrophic when attacks occur.

The Human Factor: A Critical Weakness in Cybersecurity

Over the past year, several notable cryptocurrency breaches have been traced back to one primary cause: human error. Recently, Ledger advised users to halt on-chain activities following a security breach linked to deceptive packages, while Workday reported a social engineering attack that accessed third-party customer relationship management (CRM) data. Additionally, operators tied to North Korea have utilized fake job offers to deploy malware within crypto teams.

Despite investments amounting to billions in cybersecurity, organizations continue to fall victim to simple social engineering tactics. Many teams invest extensively in advanced technical safeguards—like audits and code reviews—while overlooking important aspects of operational security and basic human factors. As more financial activities shift to blockchain technology, these blind spots could lead to significant risks in digital infrastructure.

The only way to mitigate the growing wave of social engineering attacks is through comprehensive, ongoing investments in operational security to lessen the efficacy of these tactics.

Understanding Social Engineering Attacks

Verizon’s 2025 Data Breach Investigations Report indicates that approximately 60% of data breaches are due to the "human element," which includes phishing, compromised credentials, and everyday mistakes. Social engineering exploits human trust and urgency, rather than technical vulnerabilities, making these attacks especially effective. Traditional cybersecurity measures like code reviews cannot prevent an employee from mistakenly approving a fraudulent request or downloading a malicious update.

Even highly skilled technical teams can be susceptible as human error is a fundamental flaw. Consequently, social engineering remains a prevalent cause of real-world incidents.

The Increased Stakes in the Crypto Space

In the realm of cryptocurrencies, the risks are magnified. Breaching essential cryptographic information, such as a seed phrase or an API token, can be as damaging as accessing a bank vault. The non-reversible nature of cryptocurrency transactions means that mistakes often cannot be undone. With Web3’s decentralized structure, users frequently lack immediate support when conflicts arise.

Hackers, including those backed by state-sponsored entities, have recognized the effectiveness of social engineering and have evolved their tactics. The notorious Lazarus Group, linked to North Korea, frequently employs social engineering strategies, such as fraudulent job offers, compromised files, and tailored phishing attacks that target human weaknesses.

These methods are alarmingly simple to execute, and technology companies find it challenging to defend against them. Unlike zero-day exploits, which are quickly patched, attackers can reuse social engineering tactics multiple times, allowing them to concentrate on hacking rather than research and development.

The Need for Enhanced Operational Security

Many organizations treat security merely as a regulatory formality, a viewpoint upheld by lax compliance standards. Companies may pass security audits and issue glowing reports while overlooking significant operational vulnerabilities—like storing administrative keys on personal devices, sharing credentials via chat or email, and failing to regularly update access permissions.

To address these shortcomings, companies must create and enforce robust operational security measures. Teams should utilize managed devices, implement strong endpoint protection, and ensure full-disk encryption. Using password managers and phishing-resistant multi-factor authentication (MFA) is essential, while systems must be closely monitored for access management.

Training employees is crucial since they are the frontline defense against social engineering attacks. Companies should prioritize educating staff on identifying phishing attempts, adhering to safe data practices, and understanding fundamental operational security measures.

Moreover, organizations cannot be relied upon to adopt stringent cybersecurity practices voluntarily; regulatory bodies must step in to establish enforceable security standards. Compliance frameworks must evolve to require demonstrable security practices, such as verified key management and routine access audits. Without enforcing real consequences, companies may prioritize appearances over genuine security.

Preparing for an Escalating Threat Landscape

As the number of social engineering attacks continues to escalate, the need for strong operational security has never been more pressing. The advent of generative AI has revolutionized deception tactics, enabling cybercriminals to create highly personalized and automated phishing schemes at scale. Campaigns that previously targeted individual users can now reach thousands of businesses with minimal additional effort.

AI technology also speeds up reconnaissance, allowing hackers to gather and compile information on potential victims for more convincing attacks.

Effective Countermeasures Against Social Engineering

Social engineering thrives in environments where trust is taken for granted over verification. Organizations must adopt a proactive defensive strategy that assumes ongoing threats of social engineering attacks.

Applying zero-trust principles consistently and integrating operational security practices across the organization is key. Employees should be educated about the latest social engineering tactics to ensure they can recognize and halt attacks early.

Companies must also identify trust points in their operations—where attackers can impersonate employees, software, or customers—and implement extra safeguards accordingly.

While social engineering attacks are unlikely to vanish entirely, proactive measures can make them significantly less effective and serious. By strengthening defenses, the industry can deter potential hackers, ultimately reducing the frequency of these relentless exploits.