Crypto Investors Lose $36 Million for Permitting Phishing Scheme

A recent cyberattack has caused unsuspecting crypto investors to reportedly lose 15,079 fwdETH, worth around $36 million.

In the incident, described by security experts as a permission phishing scam, criminals tricked users into unknowingly signing malicious signatures, which gave the thieves full access to individual funds.

How It Happened

Scam Sniffer, Web3’s anti-fraud platform, broke the news in an October 11 post on X, sharing the addresses of the victims and attackers.

Five hours before the report emerged, the victim, identified by the address 0xeab23c1e3776fad145e2e3dc56bcf739f6e0a393, signed a phishing signature pass, unknowingly allowing the hacker to move their 15,079 fwdETH.

The exploiter, linked to the address 0x0605edee6a8b8b553cae09abe83b2ebeb75516ec, immediately sold the tokens on the market, apparently causing the price of dETH, the associated asset, to plummet by more than 90% within 24 hours.

Responding to the incident, roffett.eth analysts warned that the dETH price drop has affected several decentralized finance (DeFi) protocols, particularly PAC Finance and Orbit Finance as the sell-off allegedly triggered vulnerabilities in their systems.

The Ripple Effect on DeFi

Phishing permissions are still relatively new in crypto circles. This stems from criminals exploiting requirements in certain DeFi tokens or contracts for users to agree to so-called permission signatures that give third parties the ability to interact with their wallets, including spending or transferring funds.

Attackers typically create fake websites or interfaces that look like legitimate services or decentralized applications (dApps) and then ask users to sign “permission” transactions. These are often disguised as legitimate requests, tricking users into granting full access to their assets.

Such hacks exploit a lack of understanding around transaction permissions, allowing hackers to drain assets from even experienced crypto users.

This is not the first time DeFi users have been targeted by phishing schemes. According to Scam Sniffer, something similar happened 12 days earlier, with the victim in that incident losing 12,083 spWETH, which was then worth around $32 million.

Due to the increasing number of such attacks, experts urge users to be extra careful when interacting with foreign links or signing transaction permits.

“Always double-check any signature you are asked to sign, and avoid clicking on unknown links,” Scam Sniffer posted as a reminder to the crypto community of the constant threat of phishing tricks.