Fake X accounts have been used to orchestrate the phishing scams that have been documented in September, affecting over 10 thousand wallets.
Sophisticated security threats, particularly phishing scams and attacks on poorly designed intelligent contracts, have posed a significant challenge to the widespread adoption of web3 protocols and digital assets.
In September alone, over $46.6 million was stolen from 10,805 victims, according to the most recent report by Scam Sniffer.
Phishing attacks were the primary method of obtaining most of the stolen funds, totaling $44.69 million. The victims were only robbed of a small amount of tracked stolen funds, approximately $2 million, through address poisoning.
In September, the Ethereum network was responsible for most of the stolen funds. A permit phishing signature was signed by an Ethereum user, resulting in the loss of 12,083 spWETH, which is approximately $32.5 million, at the end of the month.
After copying the incorrect addresses from a contaminated history, an additional Ethereum user suffered a loss of approximately $1 million.
Consequently, an average of 11,000 victims per month were victimized, resulting in the theft of over $127 million from an additional number of victims during the third quarter.
Increasing Number of Phishing Attacks impede the widespread adoption of cryptocurrency assets
In addition to the numerous phishing scams that have occurred in the recent past, the third quarter saw multiple exchanges being hacked, resulting in a more significant number of crypto users losing their funds. These funds were subsequently laundered through crypto mixers like Tornado Cash.
For instance, in mid-July, Indian cryptocurrency exchange WazirX disclosed that its multi-signature wallet was vulnerable to exploitation, resulting in the loss of over $230 million in users’ funds.
The WazirX exploiter has already laundered most of the funds through Tornado cash, precluding any possibility of users ever being repaid.
The crypto industry’s notable exploitation of users’ funds has significantly discouraged new users from injecting additional funds into the web3 space. Blockchain technology offers fewer methods for recovering stolen funds than the conventional financial sector.
However, crypto users are gradually becoming more aware of the phishing scams, primarily executed through Elon Musk’s X platform.
In addition, to guarantee the utmost security of users’ funds, an increasing number of web3 protocols have implemented security mechanisms.
Ultimately, crypto users are anticipated to safeguard themselves by becoming acquainted with the most prevalent phishing scenarios.
A broader perspective
The crypto market has reached a valuation of over $2.2 trillion, primarily due to institutional investors’ mainstream adoption of the technology and the preference for regulatory reforms. Integrating institutional funds into cryptocurrency will substantially enhance the system’s overall security, particularly in multi-chain intelligent contracts.
The rate of Bitcoin purchases has been accelerated by institutional investors, led by the US spot BTC ETFs, to mitigate inflation and geopolitical uncertainty, as indicated by on-chain data. Consequently, it is reasonable to anticipate that the crypto market will expand exponentially, regardless of the phishing attacks, as the long-term benefits exceed the short-term losses.
