Approval phishing scams in the cryptocurrency space have experienced significant growth in recent years [2], resulting in substantial financial losses. According to a report by blockchain analytics firm Chainalysis, these scams have led to over $1 billion in stolen funds since May 2021. This article examines the prevalence of approval phishing scams, their targets [4], and the need for user education and monitoring by exchange compliance teams.
Description
Approval phishing scams [1] [2] [3] [4], also known as ‘Approval Phishing’ [1], involve deceiving users into approving a malicious blockchain transaction [1] [3] [4], allowing scammers to drain specific tokens from victims’ wallets. This technique has become increasingly popular among pig-butchering scammers, who primarily target individuals on dating sites and establish trust over time [2]. Approval phishing has surpassed traditional pig butchering scams in prevalence and often employs tactics associated with romance scams.
Chainalysis has identified over 1,000 addresses engaged in approval phishing [1], with a small number of highly successful actors responsible for the majority of theft [1]. The most successful scammer is believed to have stolen nearly $45 million. It is important to note that the actual losses from this scam could be even higher, as romance scams are often underreported [4].
Conclusion
The significant financial losses incurred through approval phishing scams highlight the need for proactive measures to mitigate their impact. The industry should prioritize educating users to only approve transactions when they trust the other party involved [2]. Additionally, exchange compliance teams should closely monitor these scams and provide user education to ensure safe transaction practices. By taking these steps, the cryptocurrency community can work towards reducing the prevalence and success of approval phishing scams in the future.
References
[1] https://cryptopotato.com/chainalysis-reveals-1-billion-in-losses-to-approval-phishing-since-may-2021-report/
[2] https://www.tradingview.com/news/cointelegraph:d9e57bac2094b:0-crypto-catfishers-ditch-fake-exchanges-for-approval-phishing-scams/
[3] https://cryptonews.com/news/approval-phishing-scams-see-explosive-growth.htm
[4] https://www.infosecurity-magazine.com/news/approval-phishing-crypto-victims/
