$35 Million Lost by User in Ethereum Phishing Scam

Recent findings from blockchain security company Scam Sniffer indicate that a user recently lost 15,079 fwDETH, valued at approximately $35 million, due to a phishing scam.

This incident exploits the “permit” feature introduced by Ethereum Improvement Proposal (EIP) 2612, which enables gasless token transfers through an off-chain authorization signature, allowing others to withdraw tokens from a user’s account.

Traditionally, transferring ERC-20 tokens involves a two-step process: confirming a transaction on the blockchain while paying a gas fee, followed by transferring tokens to another account. However, the “permit” feature allows transactions to be signed off-chain, making it not only more cost-effective by eliminating gas fees but also user-friendly.

While this added convenience benefits legitimate users, it has also become a new method for fraudsters to exploit unsuspecting individuals. Token holders can be misled into signing harmful authorizations, inadvertently granting attackers the ability to steal tokens from them.

Scam Sniffer reports that phishing scams involving ERC-20 permit signatures have become increasingly prevalent. Victims are often duped into signing malicious transactions by fake social media accounts.

The firm previously uncovered the Inferno Drainer group, which has victimized thousands by creating phishing sites that imitate well-known crypto projects, coaxing users into signing off-chain transactions. In a broader context, Scam Sniffer revealed that in 2023, phishing scams resulted in over $300 million in losses for crypto users.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.