Phishing scam costs MakerDAO delegate $11.1 million in crypto assets

On June 23, a crypto investor lost $11.1 million in Maker and Pendle USDe tokens to a phishing attack. Blockchain analyst Lookonchain reported that the scammer promptly exchanged the stolen assets for ETH to prevent any attempt at recovery.

Also Read: Phishing Scams Surge Amid Ethereum Layer-2 Chain Growth

According to on-chain data, the attacker exchanged the stolen 3,657 MKR for 2,502 ETH and the 2.56 million USDe for 689 ETH. This resulted in MKR’s price crashing by around 7% to $2,271, continuing a price rut that has seen the asset shed 17% during the past month.

Arkham Intelligence data reveals that the phishing scam victim is a MakerDAO delegate. Delegates play a vital role within the Maker protocol as they are saddled with voting on critical proposals that significantly impact the protocol’s operations.

Despite the victim’s vast crypto experience, this incident highlights the high sophistication required to perform this attack. According to web3 security firm ScamSniffer, the attack succeeded because the victim had unknowingly authorized phishing signatures on multiple occasions.

Phishing scams continue to thrive

Phishing scams are among the most widespread threats in the crypto space. These scams allow attackers to pose as legitimate entities to steal sensitive data that they use to access their victims’ crypto wallets. Hackers frequently utilize crypto drainers on these phishing sites. These drainers deceive unsuspecting individuals into authorizing malicious transactions and causing substantial financial harm.

Also Read: CoinStats hit with a security breach affecting 1,590 wallets

Blockchain analysis firm Chainalysis further explained:

“Instead of stealing the usernames and passwords of victims, the operators of drainers often masquerade as web3 projects, enticing victims into connecting their crypto wallets to the drainer and approving transaction proposals that grant the operator control of the funds inside the wallet. If successful, drainers are able to directly steal users’ funds instantly.”

Over the past year, these phishing attacks have become increasingly sophisticated. Blockchain analytics firm Elliptic recently warned that scammers were using artificial intelligence tools to create more convincing phishing websites that facilitate crypto asset thefts.

Consequently, market analysts have advised crypto users to diligently verify the authenticity of any entity they engage with and exercise caution regarding suspicious activities.