How Phishing Attack Works In Crypto

Crypto-based phishing attacks are increasing day by day. A cybercriminal sends a malicious message to a crypto investor. This message claims to be from a crypto exchange or wallet provider.

Cryptocurrency is booming, and so are cryptocurrency scams. Cybercriminals are targeting crypto whales with phishing scams, tricking them into revealing the private key of their crypto wallet. These investors have massive amounts of crypto holdings, making them a prime target for scammers.

Tricksters use fake emails and websites to deceive whales into revealing their personal information. In this way, phishing scams are causing significant financial losses in the crypto industry. Currently, various security challenges need to be addressed within the cryptocurrency space.

How Phishing Attack Works In Crypto

Crypto-based phishing attacks are increasing day by day. A cybercriminal sends a malicious message to a crypto investor. This message claims to be from a crypto exchange or wallet provider.

This message is often urgent, like “Your account has been compromised. Click here to secure it.” The scammer attaches a link to a fake website with the message. This fake site asks the investor to enter private keys or login credentials.

Once the investor enters information, the attacker gets access to their cryptocurrency wallet. Now, the scammer can easily transfer funds to their wallet.

Phishing attacks target crypto wallets, cryptocurrency exchanges, and initial coin offerings. Mostly, scammers convert the stolen crypto funds into fiat money or other digital assets.

They are proficient in using sophisticated social engineering tactics to deceive victims into revealing their personal information.

Notable Phishing Scams in 2024

Below, you can check the details for the top phishing scams of 2024 that happened with crypto whales.

Scam 1: The $24 Million Whale Hack

A prominent crypto whale fell victim to a phishing scam In September 2024. This scam stole $24 Million worth of crypto assets from the whale. The attackers exploited advanced social engineering tactics to deceive investors into revealing sensitive information.

The stolen assets included liquid staking derivatives, such as Rocket Pool ETH (rETH) and Lido Staked ETH (stETH). It was valued at $8.5 Million and $15.6 Million, respectively.

The attackers used a fake website claiming to be a legitimate cryptocurrency platform. The attackers sent a phishing email to the investor about securing the account immediately due to a supposed security breach.

The email had a malicious link to the fake website. The investor clicked the link and entered their private keys and login credentials. In this way, scammers managed to drain funds from the investor’s wallet.

Scam 2: The $55 Million DAI Phishing Attack

The second high-profile phishing case is about a whale who lost $55 million worth of DAI stablecoin. The attackers used a combination of fake emails and social engineering tactics to gain control over the whale’s wallet.

Like the first case, the crypto whale clicked on a link from a malicious email. The email was about warning the investor of suspicious activity on their account.

The investor entered their login credentials by clicking on the link. After that, attackers accessed the wallet and quickly transferred the $55 million worth of DAI to their accounts.

Scam 3: The Blast Network Scam

The Blast Network experienced a significant phishing scam in October 2024. The scam resulted in the loss of approximately $35 million worth of Few Wrapped Duo ETH (fwDETH) tokens.

Attackers used sophisticated social engineering tactics to deceive the investor. They sent emails posing as customer support from a well-known DeFi platform. The emails claimed the investor’s account needed immediate verification after a security breach.

The investor entered their private keys and login credentials on the fake site. It allowed the attackers to access and transfer the fwDETH tokens. The victim also signed a fraudulent “permit” signature to enable the attackers to drain funds from the wallet.

Best Ways To Protect Against Phishing Scams

Crypto investors need to follow below practices to protect against phishing scams:

Be wary of any unsolicited emails or messages claiming to be from a cryptocurrency exchange, wallet provider, or other crypto-related entity.

Inspect the sender’s email address and domain name carefully. Official emails will typically come from a domain that matches the organization’s website address.

Hover over any links in the email or message without clicking on them. This will usually display the true destination of the link in your browser’s status bar.

Never enter your private keys, login credentials, or other sensitive information on any website or form that you access through a link in an email or message.

If you’re unsure whether an email or message is legitimate, contact the organization directly through their official website or customer support channels.

Use a hardware cryptocurrency wallet to store your digital assets securely. Hardware wallets are not connected to the internet, making them immune to phishing attacks.

Phishing scams are still targeting crypto whales. The scammers are developing unique techniques to steal crypto funds from people. It shows the increased need for tight security for crypto investors.

Investors should protect themselves from falling victim to these scams after understanding the techniques used by attackers. Start following best practices