A cryptocurrency investor has suffered a devastating loss of over $440,000 in USDC after falling victim to growing permit scams. According to data reported by security firm Scam Sniffer, the attack occurred on Monday when the wallet owner unknowingly signed a malicious authorization granting full control over their funds to a third party, marking another critical episode in digital asset security.
The theft was executed by exploiting a vulnerability in user interaction, wiping out a considerable sum in a matter of seconds. Recent data from Scam Sniffer’s monthly report indicates that during November, approximately $7.77 million was drained from over 6,000 victims, representing a 137% increase in total losses compared to October. Although the number of individual victims decreased by 42%, the average value of thefts rose drastically, suggesting that criminals are now prioritizing “whale hunting” or investors with large capital.
This type of fraud exploits Ethereum’s “permit” function, designed to facilitate gasless transactions by delegating spending rights to trusted applications. However, attackers disguise these requests in seemingly legitimate web interfaces or through social engineering tactics. Tara Annison, head of product at Twinstake, explains that scammers can execute the theft in a single quick transaction or, more insidiously, gain the permit and lie dormant waiting for more funds to be added before draining the wallet completely in the future.
Why Do Digital Wallets Fail to Stop These Sophisticated Frauds?
On the other hand, the sophistication of these attacks lies in their ability to bypass standard security alerts on many user interfaces. Harry Donnelly, CEO of Circuit, notes that these threats are widespread and rely almost exclusively on human error in failing to verify contract details. If the protocol does not match exactly the intended destination of the funds, it is a clear sign that someone is trying to steal assets via unlimited approvals, a practice that remains the Achilles’ heel for many experienced users on the blockchain.
Likewise, wallet providers like MetaMask have begun implementing clearer warnings, but scammers constantly adapt their methods. Security, therefore, relies on user vigilance when interacting with any smart contract. Annison emphasizes that the best defense is understanding exactly what functions are being signed, as often these scams present themselves under the guise of free airdrops or fake security warnings designed to generate panic and urgency in the victim.
Finally, the recovery prospects for those affected by these incidents are bleak. Martin Derka, co-founder of Zircuit Finance, warns that the chances of getting the money back are “basically zero,” as there is no counterparty to negotiate with. Once the funds leave the wallet, the immutability of the network makes restitution essentially impossible, forcing the community to focus on prevention and education as the only effective barriers against crime.
