In January, a cryptocurrency user fell victim to a scam that resulted in a loss of $12.25 million by mistakenly copying the wrong wallet address. Another user experienced an even larger loss in December, totaling $50 million under similar circumstances. Altogether, these two cases accounted for $62 million in losses, as reported by the well-known Web3 security provider, Scam Sniffer.

Mistakes in Cryptocurrency Transactions

Phishing attacks specifically targeting signatures saw a significant rise in January. Scam Sniffer’s analysis indicated that $6.27 million was pilfered from 4,741 victims, marking a staggering 207% increase from the previous month. Among the most substantial losses, one incident alone involved $3.02 million taken from SLVon and XAUt through fraudulent permit transactions, while another dragged in $1.08 million from aEthLBTC.

The problem of address poisoning arises when attackers conduct small transactions from wallet addresses closely resembling legitimate ones, deceiving users into copying incorrect addresses from their transaction histories. This results in the unintentional transfer of funds to scammers. Furthermore, signature phishing adds another layer of deceit, misguiding users into approving malicious transaction permissions that empower attackers to siphon funds later on. These deceptive tactics rely heavily on both social engineering and user error, leaving even the savviest users vulnerable.

For example, in November of the prior year, a user lost over $3 million worth of PYTH tokens by mistakenly transferring funds to a scam wallet. This misstep occurred when they copied a fraudulent deposit address from their history.

Blockchain analysts from Lookonchain revealed that the perpetrator created a nearly identical address, matching the first four characters of the authentic one, and facilitated a small SOL transaction to lend an air of legitimacy. The victim then inadvertently sent 7 million PYTH tokens without thoroughly checking the address, falling prey to the address poisoning scam, with the transferred tokens valued around $3.08 million at the time.

Multisig Wallet Scam Alert

In light of these rising threats, the non-custodial wallet service Safe, formerly recognized as Gnosis Safe, has alerted its users about a widespread campaign of address poisoning and social engineering that specifically targets multisig wallets. They disclosed that attackers set up thousands of mimic Safe addresses to trick users into misdirecting their funds. Importantly, this incident did not stem from any exploits within the protocol or infrastructure vulnerabilities.

Safe has identified about 5,000 malicious addresses, which have now been flagged and eliminated from its wallet interface to protect against erroneous fund transfers.