Scam Sniffer Reports $295 Million Loss: 320,000 Users Fall Victim to Wallet Drainers in 2023

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Popular crypto phishing scams drained almost $300 million from 320,000 users in 2023 with figures increasing monthly as bad actors deploy sophisticated techniques.

In a recent publication, cryptocurrency security firm, Scam Sniffers analyzed the market trends in the previous year stressing the activities of bad actors amid growing asset prices and extensive regulatory activities.

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According to the report wallet drainers deployed on phishing websites achieved some “level of success”  tricking users into signing big false transactions leading to loss of assets and more regulatory scrutiny in the markets.

Over the past year, phishing activities have steadily increased each month with phishing scammers employing more sophisticated tactics to evade security measures. Scam Sniffer has made findings on “Wallet Drainers” that warrant the industry’s full attention.” 

In total, wallet drainer scams recorded took out $295 million from 324,000 victims last year with airdrops and hacking incidents seen in several months. Notably, March saw larger activities linked to the price fluctuations of USD Circle.

Attacks on March 11 surged an excess of $6 million following the fluctuations in USDC rates as people interacted with fake USDC websites.

A growth in drainer services

Although the year saw drainers exit the market, they were often replaced by new ones. A typical example was when Inferno Drainer announced an exit and Angel drainers entered the scene.

Per the report, drainers deploy new and existing techniques to gain traction like paid Google and social media scams getting users to string along the fake websites.

Fake airdrops have been singled out as a major form of fraud utilized by bad actors to gain community traction as if they were interacting with the protocol. Others include Discord links and Twitter comment sections while straightforward hacking techniques involve compromising a platform’s official social media platform or simply attacking the project’s library.

Although hacking attacks have a broad impact, the community often reacts promptly, typically within 10-50 minutes. However, airdrops, organic traffic, paid advertising, and taken-over Discord links are much less noticeable,” the report added.

Highest drainers in 2023

Despite the numerous enlightening efforts and regulatory activities in the market, wallet drainers explored millions of users. Inferno Drainer was on the top of the list with $81 million stolen from 134,000 users.

MS and Angel Drainer were next on the ladder with $59 million and $20 million from 63,000 and 30,000 respectively. Other drainers that exploited millions of users include Monkey, Venom, and Pink Drainer.

Overall, cryptocurrency scams witnessed decreasing numbers compared to 2022 figures of $4 billion. Blockchain security firm Beosin reported reduced scams across all sectors of the industry with September and November being the months that recorded the most illicit activities.

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