Kerberus Bombshell: Human Error - Not Code Flaws - Responsible for Vast Majority of Web3 Financial Losses
Your crypto wallet isn't getting hacked - you're giving it away.
The Human Firewall Failure
Kerberus Labs just dropped a report that should make every crypto holder sweat. Turns out the weakest link in Web3 security isn't smart contract vulnerabilities or exchange breaches - it's the person holding the private keys.
Phishing attacks, social engineering, and good old-fashioned carelessness account for the overwhelming majority of digital asset losses. Users clicking malicious links, falling for fake support scams, and storing keys in plain text continue to fuel a multi-billion dollar drain on the ecosystem.
Security experts note the irony: we've built bulletproof decentralized systems only to watch users hand over the keys to anyone with a convincing Twitter profile picture. The report suggests basic security hygiene would prevent most incidents - but apparently remembering passwords is harder than remembering your coffee order.
Meanwhile, traditional finance executives are probably nodding along - finally something in crypto they understand: people being terrible with money.
Kerberus CTO Danor Cohen emphasized that social engineering exploits these gaps. “The transaction often appears legitimate on-chain,” he said. “Traditional security tools can’t distinguish between what a user intends to do and what an attacker manipulates them into doing. Real-time solutions need to interpret behavioral signals and analyze transactions at the wallet level.”
High-profile cases illustrate the risk. In April 2025, a U.S. investor lost $330 million in Bitcoin through a social engineering attack, despite no breach of the wallet or underlying code. Such incidents can discourage potential users and institutions from entering the market, creating barriers to mainstream adoption.
Kerberus conducted the research to highlight the discrepancy between where the industry’s security focus is directed and where users actually lose funds. The full report, including methodology and detailed findings, is available at [URL/link].
