Phishing scams: Victims lost $374.6m in 2023 – Report

According to a recent report by Chainalysis, victims have lost a staggering $374.6 million to approval phishing scammers between January and November this year.

In a preview of its upcoming ‘2024 Crypto Crime Report,’ the blockchain firm noted that the last two years have seen a significant growth in approval phishing, with victims losing $516.8 million in 2022.

Approval phishing scams involve cybercriminals posing as trusted authority figures or organizations and tricking individuals into approving fraudulent transactions.

It explained that approval phishing differs from other crypto scams because scammers trick victims into sending them cryptocurrency, usually through a phony investment opportunity or by impersonating somebody else.

It stated, “But in an approval phishing scam, the scammer tricks the user into signing a malicious blockchain transaction that gives the scammer’s address approval to spend specific tokens inside the victim’s wallet, allowing the scammer to then drain the victim’s address of those tokens at will.

“Some victims have lost tens of millions to these scams. It is important to note that in general, approval phishers send the victim’s funds to a separate wallet from the one granted approval to make transactions on the victim’s behalf.”

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The firm highlighted that suspected approval phishing revenue peaked in May 2022, but has continued to sustain momentum in 2023.

It continued, “Like many forms of cryptocurrency-based crime, the vast majority of approval phishing theft is driven by a few highly successful actors.”

The firm’s breakdown revealed that the most successful approval phishing address may have stolen $44.3 million from thousands of victim addresses, representing 4.4 percent of the total estimate stolen during the period studied.

The report added that, based on its analysis, the industry can tackle approval phishing scams through user education and pattern recognition tactics.