Why Humans Are the Weakest Link in Crypto Security

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In recent years, cybercrime targeting cryptocurrency holders has evolved rapidly, with social engineering attacks emerging as a preferred method for bad actors. Unlike brute-force attacks or technical exploits, social engineering targets the human element - the most unpredictable and often the weakest link in any security system.

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The Rise of Social Engineering in Crypto Attacks

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Phishing emails, fake customer support impersonations, and fraudulent phone calls have become commonplace. Attackers use psychological manipulation to trick individuals into revealing confidential information, such as passwords or seed phrases. These tactics work because they exploit trust, fear, and urgency -all human emotions that are difficult to control in high-pressure situations.

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The statistics paint a grim picture. According to Chainalysis, social engineering attacks accounted for a significant portion of the $3.8 billion in crypto stolen in 2023. As traditional security measures improve, attackers have shifted focus to tricking users directly.

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But is there a way to fight back?

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Securing the Human Element with Trustless Technology

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We recognize that while humans are fallible, technology can be designed to limit the impact of human error. Our platform’s approach to security is based on the concept of "trustless" infrastructure, which removes human dependency from critical processes.

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Here’s how io.finnet’s advanced self-custody solution protects against social engineering tactics.

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1. Eliminating Single Points of Failure with Multi-Party Computation (MPC)

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Unlike traditional wallets where a single private key controls access to funds, io.finnet leverages Multi-Party Computation (MPC) to distribute control across multiple parties. This means that no single person -not even a C-suite executive- has unilateral access to funds.

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How it works:

• Secret shares are distributed across multiple team members or devices.
• To execute a transaction, a minimum threshold of signers must authorize it, making it impossible for a single individual to act alone.
• Even if a social engineer manipulates one party, the attacker cannot meet the transaction’s threshold requirement.

This multi-signer approach ensures that a compromised individual does not result in a compromised wallet.

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2. Cryptographic Transaction Policies: What You See is What You Sign

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One common social engineering tactic is "message manipulation," where an attacker changes transaction details before the victim signs it. io.finnet’s cryptographically enforced transaction policies guarantee that what you approve is what gets signed -period.

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How it works:

• When a transaction request is made, its details are hashed and displayed to the signer.
• Signers verify the details on their mobile device or dashboard.
• If any detail is altered -even by a single character -the transaction is invalidated and cannot be signed.

This approach prevents attackers from tricking employees into "approving" transactions that divert funds to hacker-controlled addresses.

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3. Weighted Signing Authority and Role-Based Controls

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Human error is often the result of miscommunication or flawed internal processes. io.finnet’s role-based access control ensures that employees have only as much authority as they need.

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How it works:

• Signing power is assigned to specific roles (e.g., compliance officers, relationship managers, CEOs) based on business needs.
• Transaction approvals can require multiple layers of sign-off (e.g., a compliance officer, an executive, and an external approver).
• Organizations can configure weighted authority, meaning a CEO’s "vote" on a transaction can carry more weight than a junior employee’s.

By limiting who can sign and how much influence they have, io.finnet reduces the risk of accidental or malicious approvals.

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4. Self-Custody with No Centralized Control

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Most social engineering attacks target centralized points of failure—like traditional custody providers or third-party wallet services. io.finnet’s self-custody model eliminates this threat entirely.

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How it works:

• Clients maintain complete control over their funds.
• io.finnet never holds or stores client keys.
• Even in disaster scenarios, users can recover access to their vaults using open-source recovery tools without relying on io.finnet’s servers.

This "trustless" approach means that even if a malicious actor successfully social-engineers an io.finnet employee, they’ll gain nothing -because io.finnet holds no keys.

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5. Mobile Signer App with Biometric Authentication

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Attackers frequently target devices, but io.finnet’s Mobile Signer App provides enhanced protection.

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How it works:

• Secure Enclave stores key shares, adding hardware-level protection.
• Biometric authentication (like Face ID) is required to approve transactions, meaning only the actual device owner can authorize requests.
• No private keys are ever exposed -only encrypted key shares are stored on devices.

This feature provides hardware-based protection against device theft, SIM swaps, and social engineering attempts to hijack a user’s account.

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What Companies Should Do to Defend Against Social Engineering

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While technology like io.finnet’s self-custody and MPC reduces the risk of human error, businesses must remain proactive.

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1. Train Your Staff: Teach employees how to recognize phishing, pretexting, and impersonation attacks. Simulated phishing exercises can help employees identify and report potential threats.

2. Enforce Role-Based Access Control (RBAC): Not every employee needs signing authority. Use weighted roles to ensure no single employee has full access.

3. Deploy Cryptographically Enforced Policies: Implement transaction approval rules that require multi-signer verification for large payments or unusual transfers.

4. Adopt a Zero-Trust Mentality: Assume that every transaction request could be a scam. Encourage teams to "trust but verify" all requests, even those from senior executives.

5. Use Technology Designed to Mitigate Human Error: Trustless MPC, self-custody, and multi-signer thresholds are essential components for modern crypto security.

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The Future of Security Belongs to Trustless Systems

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Social engineering attacks aren’t going away, but their impact can be minimized. By removing the "human element" from critical processes, businesses can neutralize many of the psychological tactics that hackers rely on.

io.finnet’s platform puts businesses back in control. With self-custody, tMPC, weighted roles, and cryptographic transaction policies, io.finnet offers the most advanced defense against human error in the crypto space.

If you’re ready to move beyond traditional wallet security and eliminate social engineering risks from your crypto operations, get in touch with io.finnet today.

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