Over $46m lost to crypto phishing in February, social media impersonations at fault

February witnessed a significant uptick in crypto phishing scams, culminating in the loss of more than $46.8 million across over 57,000 individual incidents, according to a report by Scam Sniffer.

The scams, predominantly orchestrated through fake accounts on social media platform X, specifically targeted users with phishing comments from impersonated Twitter accounts, steering victims towards malicious websites.

Scam Sniffer’s analysis pinpointed the Ethereum mainnet as the primary conduit for these thefts, constituting 78% of the total stolen funds. The assets most frequently targeted were ERC-20 tokens, which represented 86% of the thefts.

The majority of these losses were attributed to victims inadvertently authorizing malicious phishing signatures, such as “ERC20 Permit” and “increaseAllowance.” These signatures inadvertently grant attackers access to the victim’s funds, often resulting in the total loss of assets contained in the compromised wallets.

The report also highlighted a novel technique employed by attackers, utilizing account abstraction wallets as token approval spenders to execute their schemes. This method, which introduces additional functionality and smart contract compatibility to Ethereum wallets, poses a new vector for phishing attacks.

Despite the alarming number of incidents in February, the report observed a decrease in the total amount of stolen funds compared to January, alongside a notable reduction in the number of victims suffering losses exceeding $1 million.

The phishing operations are sophisticated, with scammers frequently masquerading as high-profile individuals or entities on social media to disseminate phishing links. In one notable incident, an airdrop scam facilitated through a compromised MicroStrategy X account led to victims losing $440,000.

Further investigation into these fraudulent activities revealed that over 80% of comments on posts by prominent projects on X were linked to phishing attempts, according to a January analysis by blockchain security firm SlowMist. The study also found that scammers were purchasing X accounts to carry out their activities, particularly on Telegram, targeting prominent crypto projects.

In a related incident on March 7, blockchain security platform PeckShield reported a significant phishing scam that resulted in a loss of over $674,000 in USDC for an unidentified market participant, underscoring the ongoing threat of these deceptive practices.

Additionally, Scam Sniffer reported at the start of the year that phishing scams in the previous year had led to a staggering loss of over $300 million, impacting up to 320,000 users. The trend highlights the growing challenge of phishing scams in the crypto space, with social media platforms, particularly Twitter, playing a major role in the dissemination of these fraudulent schemes.