Imagine that a person who appears to be an employee of a well-known cryptocurrency exchange writes to you. He claims to have detected suspicious activity on your account and offers you, as the owner of the wallet, to immediately confirm your identity by sending an SMS code, providing a login password, or following a link. The fear of losing your funds and the seeming plausibility of the request compel you to act immediately by following the instructions. However, in reality, in this case you will definitely become another victim of psychological tricks of cryptocurrency fraudsters, giving the attackers full access to your funds. 

Such scenarios can be considered classic today. Common crypto social engineering schemes take advantage of human emotions, forcing the user to hastily reveal sensitive information. 

How do fraudsters manipulate crypto investors? They usually prey on investors’ lack of knowledge, gullibility, or overconfidence. Their goal is to convince the user to voluntarily relinquish control of their funds. Sometimes it’s the promise of easy profits, sometimes it’s the threat of losing everything.

In this article, we will dissect the main fraudulent schemes in crypto: the psychological aspects of criminal maneuvers inсlude both direct deception and more complex methods of influence, such as social engineering. Let’s familiarize ourselves with them, look at real-life examples, and make recommendations that will help you avoid getting caught up in the networks of attackers and protect yourself from attacks.

Social engineering in cryptocurrency: scammers’ methods 

Social engineering is a method of manipulation in which scammers use human emotions, trust and fear to get the victim to perform the desired actions. In the crypto industry, this method is particularly common because digital assets cannot be returned once transferred, and the anonymity of transactions makes it difficult to track criminals.

Let’s break down the most common methods of crypto social engineering fraud:

Phishing attacks 

Scammers create fake crypto exchange and wallet websites where users enter their credentials. Examples of social engineering in the cryptocurrency industry using phishing are numerous. Fake websites, often with just a single character change in the address, copy the official sites exactly and do not raise the slightest suspicion among users. That’s how, in 2023, hackers created a copy of the popular MetaMask wallet and spread it through Google ads. Users, believing they were interacting with the original platform, installed malware and gave their private keys to the attackers.

Impersonation (identity spoofing) 

This is an even more emotionally charged method of cryptocurrency fraud: the psychological techniques used by criminals induce a sense of ownership in well-known personalities in the industry (developers, analysts, managers of large companies, and other opinion leaders).

For example, in 2024, there was a high-profile case where fraudsters used dipfake videos featuring Ilon Musk and distributed them through YouTube and other social media. In the videos, Musk allegedly promoted a new investment platform that guaranteed to double deposits. As a result, users who trusted the opinion of the “richest man in the world” transferred more than $5 million in cryptocurrency to fraudulent accounts. In the end, no one was able to get their bitcoins back.

Social pressure and urgency 

This case is another classic example of fraud based on social engineering and the psychology of deception: cryptocurrency scammers create a sense of time pressure in their victims. “The promotion is only valid for 5 minutes!”, “Your funds may be frozen if you don’t meet our requirements now! For example, last year, users received fake video messages from Binance urging them to urgently re-verify to “unlock their account”. 

As a result, thousands of investors entered their credentials on the fake website, resulting in massive asset theft.

“Investment schemes” built on romantic and friendship relationships

Another prime example of how scammers use psychology in the crypto industry is playing on the feelings of intimacy that come from emotionally charged relationships built on social media. Attackers get to know their victims, gain their trust, and then offer to invest in some “amazing project in crypto”. A vivid demonstration of the use of this method is the “CryptoRom” scam, in which criminals contact the victim through Tinder and other dating apps, play the game of love with her, and convince her to invest in a supposedly profitable investment platform. In the first stage, they demonstrate successful transactions by proving their authority on the subject, using professional language, and using fake screenshots or fake websites, and then convince their “prey” to deposit ever larger sums. Eventually, the funds disappear and the “hunters” disconnect and disappear without a trace.

Attacks via fake cryptocurrency company chat rooms on Telegram and Discord 

Fake crypto chat administrators offer “customer support” and request personal information from users. For example, in 2023, a criminal scheme was uncovered involving a fake Trust Wallet support chat in Telegram. Attackers created fake support groups and sent messages to users asking them to “rebind” their wallets due to alleged security threats. After clicking on the link, users entered their cid phrases, and the fraudsters gained full access to their funds and transferred them to their own addresses. Losses from this scheme amounted to hundreds of thousands of dollars, and the investigation is still ongoing.

Thus, we see that cryptocurrency scammers using social engineering methods actively use such psychological techniques as

• Emotional pressure (fear of losing funds, greed for quick profits, trust in famous personalities or brands).
• Creating the illusion of authority (use of logos, fake accounts, links to fake news and supposedly official statements).
• Playing on trust (romantic schemes, participation in crypto-communities, use of familiar names or recommendations from “friends”).
• Creating a sense of urgency (limited time to make a decision, threats of account suspension, promises of great benefits for immediate action).
• Use of complex terms and pseudo-technical explanations (fraudsters use technical terms or jargon to confuse the victim and give the impression that they are really experts).

Cryptocurrency fraud: exploiting trust and emotion is a trend gaining momentum

Analytical reports confirm that the use of social engineering techniques to steal cryptocurrency continues to gain momentum, accounting for an increasing share of aggregate cryptojacking data year after year. According to Chainalysis, fraudsters will steal more than $3.8 billion in cryptocurrency in 2023, with a significant portion of those funds stolen using social engineering techniques. In turn, 2024 will see a rapid increase in the use of dipfakes to advertise fake crypto resources, with fraudsters using images of famous personalities to promote their schemes. According to analyst firms, one major criminal group stole more than $16 million from victims using such methods in a 13-month period. It’s a good thing that dipfake technology has evolved to create more than convincing fakes that can fool even experienced users. 

Phishing and social engineering in the cryptocurrency world have become one of the main tools of criminals. Major platforms such as Binance and Coinbase regularly publish warnings about new attack schemes and psychological tricks used by cryptocurrency scammers, but unfortunately, users do not always pay proper attention to them. 

Tips to protect against social engineering in cryptocurrencies

In order to minimize risks and protect your digital assets, it’s important to have a full understanding of how to avoid falling victim to social engineering in the crypto industry. Here are some key recommendations:

1. Be vigilant when receiving messages. Don’t trust strangers, even if they claim to be from cryptocurrency companies. Remember that official exchanges and asset storage services never ask for private keys or seed phrases.
2. Verify the authenticity of websites and applications. Use official links provided on company websites. Install applications only from official stores (Google Play, App Store). Verify that the website URL is correct before entering data. Check for news and alerts on the official websites of cryptocurrency platforms.
3. Protect your accounts. Never share your personal information with anyone. Use strong passwords and unique logins for each platform. Don’t save login information in browsers or notes.
4. Educate yourself on how to recognize social engineering in cryptography. Study the relevant psychology literature to help you recognize the techniques used to emotionalize your identity. An artificially created sense of urgency (“confirm your identity immediately or we will block your account”), the use of other people’s famous personalities (opinion leaders, stars), pressure on emotions (pity, fear, curiosity) or the promise of cosmic profits should become a marker for you that you are in a situation that requires increased attention and vigilance.
5. Don’t accept investment offers from strangers. The primary defense against cryptocurrency social engineering is to make informed, responsible, and balanced financial decisions.

Conclusion 

Blockchain and cryptocurrency social engineering remains a major threat to investors. Adapting to technological advances, fraudsters are finding increasingly sophisticated ways to defraud by exploiting victims’ trust and emotions. In response, professional market participants together with cybersecurity specialists are developing a set of measures to prevent fraud: social engineering in crypto requires a comprehensive approach. Crypto exchanges and wallets are implementing improved verification mechanisms, automated systems to block suspicious transactions, and user awareness campaigns. However, the main line of defense remains the investors themselves — their vigilance and ability to recognize malicious tricks.

Learning to recognize social engineering in the crypto industry is becoming a critical task for all market participants. The more aware users are, the harder it will be for criminals to succeed in their scams. Regular study of new attack tactics, use of proven security tools, and a critical approach to information are the key steps to protecting your assets in the world of cryptocurrency.

Thank you for reading our article. Invest safely and profitably!

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