In a startling revelation by Scam Sniffer, the cryptocurrency world has been hit hard by a series of sophisticated phishing scams in 2023. The team behind the crypto security tool has that Wallet Drainers, a type of malware, have successfully siphoned off nearly $295 million from approximately 324,000 unsuspecting victims in the space.
These malicious software programs, predominantly found on phishing websites, trick users into authorizing harmful transactions, leading to significant asset theft from their crypto wallets.
ETH’s price trends to the upside on the daily chart but with a small loss on low timeframes. Source:
Wallet Drainers: The New Threat in Crypto Security?
A closer examination of the data reveals a worrying trend of increasing phishing activities; each correlated with specific events in the crypto space. For instance, a significant theft of almost $7 million was reported on March 11, coinciding with fluctuations in USDC rates and an impersonation scam of Circle, the company behind the stablecoin.
Additionally, a noticeable theft spike was observed around March 24, aligning with the hacking of Arbitrum’s Discord and its airdrop date. Scam Sniffer’s report highlighted several notable Wallet Drainers, including Inferno Drainer, which alone stole $81 million from 134,000 victims, and MS Drainer, with a haul of $59 million from 63,000 victims.
The report notes the alarming scale and velocity of these operations. For example, Monkey Drainer extracted $16 million over six months, whereas Inferno Drainer looted $81 million in just nine months, as seen in the chart below. The report also sheds light on the common phishing signatures these Drainers use.
Depending on the type of assets in a victim’s wallet, various phishing methods are deployed, ranging from increased allowance to ERC20 permit signatures. The most severe cases involved victims losing millions to these sophisticated scams.
Scam Sniffer has ramped up its efforts in response to this growing threat. Over the past year, the tool scanned nearly 12 million URLs, identifying close to 145,000 as malicious. Furthermore, its open-source blacklist contains nearly 100,000 dangerous domains, continuously updated to platforms like Chainabuse.
The increasing use of smart contracts by scammers, such as multicall for efficient asset transfers and CREATE2 & CREATE functions to bypass wallet security checks, marks a significant change from the previous year. This evolution underscores the need for enhanced vigilance and updated security measures in the crypto community.
Scam Sniffer’s work extends beyond just tracking and reporting. The team actively collaborates with well-known platforms, offering its services to their users. They encourage all stakeholders in the crypto ecosystem to “join the fight against phishing, emphasizing that security is a collective responsibility.”
In closing, Scam Sniffer acknowledges the support of its community:
(…) crypto phishing involves multiple parties, crypto, and non-crypto platforms. Security requires a collective effort. If you wish to enhance your product’s capabilities in this area, please contact us at [email protected].
Finally, thanks to all the supporters of Scam Sniffer! Your support is the motivation that keeps us going.
A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.
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