Introduction
Crypto romance scammers have found a new way to deceive unsuspecting victims: targeted approval phishing. These smooth-talking fraudsters have seen explosive growth in this technique over the past two years, resulting in millions of dollars in stolen cryptocurrency. Let's dive into the details.
The Rise of Approval Phishing
According to a recent report by on-chain analytics firm Chainalysis, approval phishing has become a popular scam among crypto thieves. In 2023 alone, an estimated $374 million in suspected stolen crypto was obtained through this method. Approval phishing involves tricking victims into signing transactions that grant scammers access to their wallets, ultimately allowing them to drain their funds. While not a new tactic, it has become increasingly prevalent among these cunning criminals.
The Pig-Butchering Technique
Scammers engaging in pig butchering scams start by connecting with victims on dating sites and gradually building trust over weeks or even months. They employ various tactics to convince victims to part with their money, often luring them into fake investment schemes. The term "pig butchering" derives from the scammers' strategy of gradually extracting as much money as possible from their targets before making their final move.
A Change in Tactics
Chainalysis' cybercrimes research lead, Eric Jardine, explained that the new approval phishing method represents a shift in the way pig-butchering scammers operate. Traditionally, romance scams involved a slow and subtle approach. Scammers would establish trust with their targets, gradually introducing them to fake investment websites and encouraging them to invest heavily. However, this new method bypasses the need for a prolonged grooming period. Instead, scammers only need to convince victims to sign a transaction, giving them immediate access to drain their funds.
The Extent of the Scam
MetaMask lead product manager Taylor Monahan discovered over a thousand addresses linked to targeted approval phishing scams, resulting in an estimated total theft of $1 billion since May 2021. It's important to note that romance scams are often underreported, meaning the actual figure could be much higher. Chainalysis also identified one particular approval phishing address that has likely profited $44.3 million from thousands of victim addresses. The top 10 approval phishing addresses combined account for nearly 16% of all stolen funds during the study period.
Protecting Against Approval Phishing
Chainalysis suggests that the industry should prioritize educating users about the risks of signing approval transactions without complete trust in the other party involved. By raising awareness and promoting caution, individuals can better protect themselves from falling victim to these scams.
As the world of crypto continues to evolve, scammers are finding new and inventive ways to exploit unsuspecting individuals. It's crucial for users to stay vigilant and informed to safeguard their hard-earned funds.
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