Crypto Whale Loses $24M in Staked Ethereum to Phishing Attack

Since the first computer virus was developed, computer programmers and IT security specialists have striven to create efficient cybersecurity tools. Although computer viruses are not as much of a worry as before due to advances in antivirus technology, cybercriminals continue to adapt their techniques. New methods, especially phishing attacks, are one of the most popular means of online scams today. And even crypto holders are not safe from the threat.

What Is a Phishing Attack?

Phishing attacks are a cybercrime that involves sending fraudulent communications masked in the form of a reputable and legitimate source. The source is often through an email or a text message, but it can also be in the form of a webpage. The goal is to steal funds and access sensitive data from the details entered into the webpage. Alternatively, phishing attacks can install malware on a victim’s device, which can be a source of data theft or other fraudulent activities. 

Read More: Crypto Tax Reporting Rules Unveiled: What You Need to Know

Cybercrime and Blockchain Technology

Blockchain technology is designed to be near-flawless in terms of security. The various consensus mechanisms are designed to ensure that no single node gains total network control. Additionally, the blockchain’s inherent immutability means that records cannot be altered, and transactions cannot be tampered with. As such, cryptocurrency dealings are some of the most secure forms of online transactions. However, cybercriminals continue to find new ways to take advantage of loopholes or even create loopholes where there were none before. In the past, various crypto exchanges have been the victims of major cyberattacks, losing millions of dollars in the process. DeFi platforms are no exception, with a recent phishing attack recently breaking the record for the highest amount stolen from an individual. 

Related: From Bitcoin to Blockbusters: 5 Crypto Movies You Can’t-Miss

Crypto Whale Loses Significant Funds

One cannot be too careful when carrying out crypto transactions online. As a crypto whale recently found out to their detriment, it’s essential to fully understand the technicalities of crypto platforms before using them. The crypto security firm PeckShield recently reported that an investor lost their entire address balance of Lido Staked ETH and Rocket Pool ETH. The hack was completed in just two transactions, with 9,579 stETH and 4,851 rETH stolen, respectively. In all, the value of the assets amounted to a staggering $24 million.

Crypto Whale Phishing Scam: Causes and Vulnerabilities

Reports indicate that a large chunk of the stolen funds have been swapped for DAI and transferred into FixedFloat, a fully automated crypto exchange platform. The remaining funds have been moved to three separate wallet addresses. The investor made the phishing scam possible by enabling token approvals to the scammer by signing “Increase Allowance” transactions. Such access permissions are a primary feature of ERC-20 tokens. The allowances enable a third party to access funds belonging to a different owner via smart contracts. 

Conclusion

Many crypto market observers have remarked that anonymous developers could use the Ethereum blockchain’s access permissions feature to deploy fraudulent smart contracts on the network. Nevertheless, due diligence must be considered while carrying out online crypto transactions. As long as crypto tokens continue to be a valuable asset, scammers will be innovating new ways to steal them. Moreover, there will be another interesting crypto’s topic which can refer to:https://player.me/taiwan-to-restrict-unregistered-noncompliant-foreign-crypto-exchanges/

Frequently Asked Questions 

How Can One Protect Against a Phishing Attack?

Phishing attacks work by stealing user data or having victims inadvertently install malware by clicking on fraudulent links. These links are often found in emails, text messages, or even web pages. To protect against such attacks, you should never click on links from suspicious-looking emails or text messages. Additionally, when entering sensitive user data on web pages, you should ensure the network is secure. You can also inspect the web URL to ensure it carries an SSL certificate, which guarantees an encrypted connection.

What Is Ethereum Staking?

Ethereum staking is the process of transaction validation on the Ethereum network. This method sees users lock in ETH on the network to benefit from validator privileges. The tokens staked are used to help secure the network, while investors staking tokens get to earn rewards. Staking in Ether means becoming a validator and powering the proof-of-stake protocols. The staked tokens are used to authenticate transactions and create new blocks on the network. 

How Do Crypto Scammers Operate?

Like any other form of cybercrime, scammers use many methods. Because of the robust security mechanisms inherent in blockchain technology, scammers must be equally innovative in their attempts to steal digital assets. Investment schemes are one of the most popular methods, as are the rug pulls, romance and phishing scams. Scammers are notorious for using social media platforms and fake giveaways to lure unsuspecting investors. Ponzi schemes, phoney crypto exchanges and flash loan attacks are less popular but equally effective ways crypto scammers operate.