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Social Media Phishing Scams Cost Crypto Users $46.8 Million in February

In a concerning trend on the social media platform X (formerly Twitter), fake accounts have become a predominant tool for cybercriminals, leading to over 57,000 victims of crypto phishing scams in February alone. The latest report by Scam Sniffer sheds light on the alarming rise of these fraudulent activities, revealing that victims collectively lost over $46.8 million to crypto phishing scams within the month. A significant portion of these scams involved impersonated Twitter accounts, directing unsuspecting users to phishing websites.

Ethereum’s mainnet was the most affected network, with Scam Sniffer’s analysis indicating that it accounted for 78% of the total thefts. Furthermore, ERC-20 tokens emerged as the primary target, constituting 86% of the stolen assets. The thefts predominantly occurred through phishing techniques that tricked users into signing malicious transaction approvals and signatures, such as Permit, IncreaseAllowance, and Uniswap Permit2. Alarmingly, wallet drainers have also begun leveraging account abstraction wallets as token approval spenders to execute their scams more effectively. Account abstraction enhances Ethereum wallets by providing additional functionality and compatibility with smart contracts.

Despite the growing number of phishing victims in February, there was a slight silver lining as the total amount stolen saw a reduction compared to January. The report also highlighted a significant decrease in the incidence of victims losing more than $1 million.

Cybercriminals often impersonate or hack the social media accounts of prominent individuals and organizations to post phishing links. High-profile breaches in February include the hacking of MicroStrategy’s X account, resulting in approximately $440,000 in crypto losses. Other notable entities such as Compound Finance, Rocket Pool, Blockchain Capital, and even Ethereum’s co-founder Vitalik Buterin have been targeted by these phishing attacks in recent months.

The rising trend of ‘approval phishing,’ a method that tricks victims into authorizing transactions granting scammers access to their wallets, has been particularly worrisome. The FBI has also issued warnings, suggesting that millennials are the demographic most susceptible to falling prey to these sophisticated investment fraud schemes. This alarming trend underscores the need for heightened awareness and vigilance among social media users, particularly within the crypto community.

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