Cryptocurrency criminals have enjoyed explosive growth over the past two years thanks to the proliferation of approval phishing scams.
According to Chainalysis, a leading blockchain analytics firm, cyber criminals have drained more than $1B in funds since May 2021 via the hacking technique. Data from Dune Analytics shows the figure topping $381M this year from 56,031 transactions.
Chainalysis discloses that the $1B figure is “likely the tip of the iceberg” due to the notorious underreporting of romance scams and other criminal activity. Romance scams refers to scammers building rapport and a relationship with their victims to later convince them to approve malicious transactions.
Approval phishing scams occur when malicious actors trick crypto users into signing fraudulent blockchain transactions granting the scammers approval to send tokens from the victim’s address. Once an unwitting user has signed the malicious transaction, scammers use the approval to drain any funds held in the compromised wallet.
Chainalysis said the largest approval phishing scam drained a whopping $44.3M from the thousands of addresses. The ten largest approval phishing attacks account for 15.9% of funds lost to approval scammers from May 2021 until November 2023, while the 73 biggest made up half of the total.
Looking back, victims of approval phishing scams lost $516M in 2022. However, Chainalysis said 2023 hosted a decline in this type of criminal activity, currently sitting at $381M stolen for the year.
Notwithstanding Elizabeth Warren’s insistence that crypto is solely used by criminals, just 1,013 addresses were responsible for the lion’s share of funds stolen by approval phishers.
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