TL;DR
- A crypto investor lost $2.6M in stablecoins after falling victim to a sophisticated double phishing scam that exploited zero-value transfers.
- In a three-hour window, fraudulent transactions of $843K USDT and $1.75M were executed, with the scam manipulating the wallet’s transaction history to appear legitimate.
- The scam highlights a growing on-chain phishing threat, urging investors to adopt stricter verification methods to safeguard against deceptive address poisoning tactics.
A single crypto investor fell prey to a sophisticated double phishing scam, resulting in a staggering loss of $2.6 million in stablecoins. The incident, reported by compliance firm Cyvers, unfolded over a few short hours and highlights the growing threat posed by on-chain phishing tactics, specifically the use of zero-value transfers.
https://twitter.com/CyversAlerts/status/1926915902001254475
The Scam Unfolded
Within a three-hour window, the victim executed two unwitting stablecoin transactions. The first saw an outflow of $843,000 in USDT, followed soon after by a second transaction totaling $1.75 million. Both transfers were induced by deceptive zero-value transfer operations that injected fraudulent transactions into the victim’s wallet history.
These zero-value activities padded the transaction log with what appeared to be familiar addresses, tricking the victim into believing they were interacting with known contacts. Such rapid execution not only magnified the financial damage but also underscored the attackers’ meticulous timing and planning.
Understanding the Zero-Value Transfer Technique
Zero-value transfers take advantage of the token transfer function found in blockchain networks. Unlike regular transactions, these transfers do not move actual funds, so they require no signature from the victim’s private key.
However, because they are confirmed on-chain, the spoofed addresses are permanently recorded in the wallet’s history. This creates an illusion of legitimacy, leading victims to mistakenly trust these entries as safe recipients for subsequent transactions. Essentially, the scam is a modern twist on the “address poisoning” strategy, where attackers subtly replace genuine addresses with counterfeit ones, banking on user oversight and reliance on partial address matching.
Industry Response and Future Implications
This alarming case has sent ripples through the crypto community, prompting renewed calls for enhanced security measures and user awareness. Experts stress that even seasoned traders can be vulnerable if they rely solely on visual confirmation in their transaction histories.
As blockchain security tools and artificial intelligence systems evolve, they may offer much-needed solutions to detect and flag such deceptive practices. Meanwhile, this incident stands as a stark reminder for investors to verify recipient addresses with utmost caution and to adopt more secure transaction protocols.
