Introduction: A New Twist in Crypto Scams
According to a recent report by on-chain analytics firm Chainalysis, romance scammers in the cryptocurrency space are increasingly turning to a technique called approval phishing. This method has reportedly led to significant losses for victims, with suspected stolen crypto amounting to $374 million in 2023 alone.
The Rise of Approval Phishing
Approval phishing is a devious scam where victims are duped into authorizing transactions that grant scammers access to their crypto wallets, enabling the theft of funds. While not a novel strategy, its usage has intensified, particularly among those engaged in pig-butchering scams.
The Evolution of Crypto Romance Scams
Pig-butchering scams start on dating websites, where fraudsters establish trust over time with their victims. These scammers then lure their targets into fake investment schemes, gradually “fattening” them for a bigger financial take. The new approval phishing approach marks a deviation from the traditional slow-burn method of these scams.
Insights from Chainalysis and MetaMask
Eric Jardine, Chainalysis’ cybercrimes research lead, notes that the new method is more direct, requiring only a single transaction approval to drain a victim’s funds. Meanwhile, Taylor Monahan, MetaMask’s lead product manager, identified over a thousand addresses linked to these scams, estimating a total theft of $1 billion since May 2021.
The Underreported Nature of Romance Scams
Romance scams often go underreported, suggesting that the actual figures could be much higher. Chainalysis also highlighted that the ten largest approval phishing addresses accounted for nearly 16% of all stolen value in the studied period.
Conclusion: Educating Users Against Scams
Chainalysis concludes that educating users about the dangers of signing approval transactions without complete trust is crucial in combating these scams. The report underscores the need for heightened awareness and caution among cryptocurrency users in the face of evolving scam tactics.
