- Chainalysis, an on-chain analytics firm, reports a new type of crypto scam, known as ‘approval phishing,’ which has led to at least $374 million in suspected stolen crypto in 2023.
- The scam, part of a broader strategy called ‘pig butchering,’ involves scammers forming relationships with victims on dating sites and gradually convincing them to invest in fake schemes.
- MetaMask’s Taylor Monahan revealed that over a thousand addresses are linked to these scams, with an estimated $1 billion stolen from victims since May 2021. The real number might be even higher due to underreporting.
The world of cryptocurrency is witnessing a worrying trend in the form of sophisticated scams. Recently, a report by Chainalysis, a prominent analytics firm in the blockchain sphere, shed light on a worrying development: a dramatic increase in “approval phishing.” This scam has seen rampant growth over the past couple of years, with a staggering amount of money – around $374 million – suspected to be stolen in 2023 alone.
Approval phishing is a technique where scammers trick individuals into signing off on transactions. These transactions grant the scammers access to the victims’ digital wallets, allowing them to siphon off funds. This method isn’t new but is now being employed more frequently in a more elaborate scam known as “pig butchering.”‘
The Anatomy of ‘Pig Butchering’ Scams
“Pig butchering” is a term that might sound strange in the context of digital currency, but it aptly describes the method used by these scammers. It begins innocently enough, with scammers meeting potential victims on dating websites. Over time, they build a relationship and a sense of trust. Once they’ve gained the victim’s confidence, the scammer introduces the idea of a lucrative investment opportunity – often a fake cryptocurrency investment website.
Eric Jardine from Chainalysis, a researcher studying cybercrimes, explained that these scams are a slow and calculated process. The scammer nurtures the relationship over weeks or months, convincing the victim to pour as much money as possible into these fictitious investment schemes. The scam culminates when the victim grows suspicious, or the scammer determines they have drained as much as they can from their target.
Shift in Scamming Strategies
What makes the new phishing approval method particularly alarming is its efficiency. Unlike traditional pig-butchering scams that require a long con, this method merely requires the victim to authorize a single transaction. This single act is enough for scammers to deplete the victim’s funds.
Taylor Monahan from MetaMask, a well-known cryptocurrency wallet, identified a disturbing number of addresses linked to these scams. Over a thousand addresses have been implicated, with an estimated theft of $1 billion since May 2021. Given the tendency for romance scams to go unreported, the actual figure could be significantly higher.
Chainalysis further revealed that one of the most successful addresses in approval phishing has likely amassed a fortune of $44.3 million, exploiting thousands of victims. The ten most prolific addresses in this scam accounted for nearly 16% of the total value stolen during the analyzed period.
Conclusion
This investigative insight into the dark world of crypto scams is a stark reminder of the perils lurking in the digital finance space. As scammers become more sophisticated in their methods, the need for vigilance and skepticism becomes ever more critical, especially in the realm of online investments and cryptocurrencies.
