On a more macro level, any action related to behavioral psychology can be considered social engineering. However, this concept is not always associated with criminal or fraudulent activities. In fact, social engineering is widely used and studied in fields such as social science, psychology, and marketing.

When it comes to cybersecurity, social engineering refers to a range of malicious activities designed to manipulate people into undesirable behavior, such as stealing personal identification information that can later be used to steal personal or confidential information from their company. Identity fraud is a common consequence of these attacks, and in many cases can lead to significant financial losses.

Social engineering is often seen as a cyber threat, but the concept has been around for a long time, and the term can also be related to real-world fraud, usually involving impersonating auditors or IT experts. However, the advent of the Internet has made it easier for hackers to conduct manipulation attacks on a wider scale, and unfortunately these malicious activities also occur in the cryptocurrency field.


How does it work?

All types of social engineering rely on weaknesses in human psychology. Scammers use emotions to manipulate and deceive victims. They prey on people's fear, greed, curiosity, and even their desire to help others. Among the many types of malicious social engineering, phishing is one of the most common and well-known examples.

Phishing

Phishing emails often mimic messages from legitimate companies, such as national banks, chain stores, reputable online stores, or email providers. In some cases, these scam emails warn users that their accounts need to be updated or that unusual activity has occurred, and ask them to provide personal information to confirm their identity and manage their accounts. Out of fear, some users immediately click on the link and navigate to the fake website, providing the criminals with the data they need. At this point, the information is in the hands of the hackers.

Threat software

Social engineering techniques are also used to spread so-called scareware. As the name implies, scareware is a type of malware designed to intimidate and threaten users. They often involve creating false alerts in an attempt to trick victims into installing fraudulent software that appears legitimate or tricking users into visiting websites with the intent of infecting their systems. This technique often relies on users' fears that their systems have been compromised, convincing them to click on web banners or pop-up windows. These messages often say, "Your system has been infected, click here to clean it."

Deception

Phishing is another type of social engineering that causes trouble for many unwary users. It usually takes advantage of the user's greed or curiosity to lure the victim. For example, a scammer can create a website that offers free content, such as music files, videos, or books. In order to access these files, the user is usually required to create an account and provide their personal information. In some cases, creating an account may not be necessary, as the downloaded file can also be directly infected with malware that will invade the victim's computer system and collect their sensitive data.

In real life, phishing scams can also be carried out through the use of USB sticks and external hard drives. Scammers may deliberately leave infected devices in public places to lure curious people to check it out and eventually infect their PCs.


Social Engineering and Cryptocurrency

When it comes to financial markets, a greedy mentality can be very dangerous, and traders and investors are particularly vulnerable to phishing, Ponzi and pyramid schemes, and other types of scams. In the blockchain industry, the attention generated by cryptocurrencies has attracted many newcomers to the field in a relatively short period of time (especially during bull markets).

While many people do not fully understand how cryptocurrencies work, they often hear news reports about the market’s potential to generate huge gains and blindly invest without conducting adequate research. Social engineering is particularly concerning for newbies, as they are often trapped by their own greed or fear.

On one hand, the desire for quick profits and money can make newbies chase fake benefits and believe in airdrop promises. On the other hand, users may pay ransoms out of fear of having their private files destroyed. In some cases, users are simply deceived by fake alerts or messages created by hackers and are not actually infected with ransomware.


How to Prevent Social Engineering Attacks

As mentioned before, social engineering scams work simply because they prey on human weaknesses. They often use fear as a motivator to prompt people to take immediate action to protect themselves (or their systems) from unreal threats. Some social engineering attacks also rely on human greed to lure victims into various types of investment scams. So it's important to remember that if an offer looks too good to be true, it probably is.

While some scammers are very sophisticated, the average attacker makes obvious mistakes. Some phishing emails and threat actors often have titles that contain grammatical or spelling errors that only fool the unwary - so be careful.

To avoid falling victim to a social engineering attack, you should be aware of the following security measures:

  • Educate yourself, your family, and your friends. Teach them common examples of malicious social engineering and introduce them to key security principles.

  • Be cautious when handling email attachments and links. Avoid clicking on ads and websites from unknown sources;

  • Install genuine anti-virus software and keep your software applications and operating system up to date;

  • If you want to protect your email login credentials and other personal data, use a multi-factor authentication solution such as setting up two-factor authentication (2FA) for your Binance account.

  • For businesses: Employees should be empowered to identify social engineering attacks to prevent phishing and social engineering attacks.


Concluding Thoughts

Cybercriminals are always looking for new ways to deceive users, aiming to steal their funds and sensitive information, so it is important to educate yourself and those around you. The Internet provides a safe haven for these types of scams, which is especially common in the cryptocurrency space. So be careful, stay vigilant, and avoid falling into social engineering traps.

Additionally, anyone who decides to trade or invest in cryptocurrencies should do sufficient research beforehand to ensure they have a good understanding of the market and workings of blockchain technology.