Crypto VC Fund Suffers $36M Phishing Attack by Signing Fraudulent Permit

A cryptocurrency VC firm has become a massive phishing victim and lost $36m worth of fwDETH, the wrapped Ethereum tokens. The crime occurred on October 11. The attackers used a fake signature saying that they had a permit to carry out operations on the victim’s account without his consent.

As per a report by a blockchain monitoring platform, Lookonchain, the phishing attack was directed at an affiliate related to Continue Capital, a major crypto VC firm. Such an atrocious transaction led to the unauthorized transfer of 15,079 fwDETH tokens.

This phishing scheme focused on a standard and popular signature method that allows users to verify transactions without a tangible indication of their assets. In this case, the attackers barely made the victim authorize a transaction, allowing for immediate funds transfer.

Crazy!

Someone(probably related to @ContinueFund) lost 15,079 fwDETH(worth $36M) by signing a "permit" phishing signature 6 hours ago!

To avoid being phished, please do not click on any unknown links and do not sign any unknown signatures.
Always double-check when signing… pic.twitter.com/dTG4Uzsf43

— Lookonchain (@lookonchain) October 11, 2024

Blockchain data revealed that the victim’s wallet address, associated with Continue Capital, granted permission to transfer the fwDETH tokens on the Blast chain. The stolen funds were quickly transferred to a hacker-controlled address (0x0605edee6a8b8b553cae09abe83b2ebeb75516ec), where they were rapidly sold off. This caused fwDETH prices to plummet by over 95% before experiencing a partial recovery.

Crypto Protocols Affected by $36 Million Phishing Attack

Due to the stolen assets’ immediate traceability, bug markets affecting DeFi protocols that rely on fwDETH liquidity, such as PAC Finance and Orbit Finance, were also impacted. While the full scale of this damage to these protocols ft is still being measured, analysts have observed that the mass selloff pushed existing liquidity problems through declines in token prices, which may have impacted other investors who hold fwDETH.

This $36 million phishing attack involving a fraudulent permit signature is one of the biggest cybercrimes and shows that more frequent and complex cyber scams are affecting the cryptocurrency market. The most significant concern now is phishing because the attackers pretend to operate a legitimate transaction.

Similar phishing scams have also cost other investors vast sums of money. In September, another user was drained of $32.4 m in spWETH tokens in a phishing scam associated with the DeFi platform Spark. Similarly, a crypto whale lost about $55.4 million in Dai stablecoins in August because of a phishing scam.

According to cybersecurity firm CertiK, in the third quarter of the year 2024, it will be able to lose more than $753 million for various forms of fraud, including $127 million for phishing alone. Phishing grows to be a significant concern; it not only represents the insecurity that persists in the crypto market but also shows that attackers actively seek to take advantage of the available gaps to incorporate retail and institutional consumers.

🧵 Hack3D Report: Q3 2024 🧵

155 hacks, scams, and exploits drained $753,094,610 from Web3 in Q3 2024. This represents a 9.5% increase in value lost compared to Q2, despite fewer incidents.

🎥 Watch the breakdown in the video below.
📊 View the full report:… pic.twitter.com/WYhp7fGFCx

— CertiK (@CertiK) October 2, 2024

With the steady growth of the cryptocurrency market, calls for measures that would strengthen security and enhance users’ levels of consciousness have never been heard before.