$55.47 Million In DAI Stolen After A Complex Phishing Attack: Who’s Safe In These Streets?

Crypto allows users to send funds without an intermediary. Moreover, all approved funds are irreversible. This is advantageous in some way.

The problem is that it can be so costly now that the sender will mostly be blamed for carelessness if they don’t review the receiving address or send it to a different chain.

Since Bitcoin and early cryptocurrencies found adoption, billions have been lost either through hacks, outright theft, or even scams.

In fact, Ethereum was compromised in the early years, forcing a hard fork. There is now a less popular chain, Ethereum Classic, whose believers assert that code is law.

All these malicious agents take advantage of crypto transactions’ irreversible nature. Whenever the sender approves a transaction, it is final, and it is confirmed by a miner or validator.

Even if hundreds of millions of dollars are involved, it is unlikely that the community will intervene; maybe enablers like exchanges and other centralized entities may choose to help (out of mercy).

The $55.47 Million Phishing Attack

Yesterday, one crypto whale lost a whopping $55.47 million in DAO after falling victim to arguably one of the most sophisticated scams in recent months.

(Source)

According to Lookonchain, the whale unknowingly (he/she wasn’t keen enough) signed an unknown transaction, effectively approving the transfer of the $55.47 million to the attacking entity.

With this transaction approved and the funds moved to the third party, hackers took charge of the funds and converted a portion of DAI to ETH.

(Source)

So far, there has been no communication from the hacker.

However, the phishing attack demonstrated the challenges faced by crypto, especially by public chains like Ethereum and even Solana.

Impact On Adoption: Do Crypto Hackers Slow Adoption?

The address-poisoning attack, like in this case where the attacker created an almost similar address to the legitimate receiving address, showcases how advanced and sophisticated have become.

Critics now say such rampant attacks will slow adoption, discouraging the willing from engaging as they fear losing funds.

It is easy to see why. This attack is not the first (nor will it be the last).

In May, another user fell victim to a similar address-poisoning attack, this time losing $70 million in wBTC.

(Source)

The good news is that the victim and the hacker were able to negotiate a settlement, with the hacker agreeing to a 10% cut of the funds.

(Source)

Aware that crypto transfers are irreversible, users should exercise caution.

Most importantly, users should thoroughly check the receiving address carefully before signing and approving a transaction.

DISCOVER: The Best Bitcoin and Cryptocurrency Exchange Guide

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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