A recent research report published by Web3.0 security experts, Forta Network in collaboration with Blockfence, has shed light on a concerning trend within the Ethereum (ETH) community. This alarming trend known as “sleepdropping” has inflicted substantial financial losses, amounting to a staggering $11.5 million since its initial detection in December 2022.
Understanding the Sleepdropping Exploit
The term “sleepdropping” refers to a fraudulent operation specifically designed to deceive Ethereum users, leaving them vulnerable to substantial financial harm. This malicious scheme operates covertly, making it particularly insidious.
Notably, the report issued by Forta Network and Blockfence outlines the methods employed by the perpetrators to exploit unsuspecting victims. The scheme typically involves the deployment of sophisticated phishing techniques and deceptive tactics aimed at luring users into divulging their private keys or sensitive information.
Ethereum Users Experience Losses
Once the information is obtained, the scammers gain unauthorized access to victims’ Ethereum wallets, ultimately siphoning off their digital assets.
Although the identity of the scammers behind this dubious operation remains unknown, reports show that over 20,000 users have fallen prey to the fraudulent operation. Currently, over half a million addresses have been affected by the deceptive token airdrops.
Meanwhile, the research further outlined the scam in three stages. First, the deceptive airdrop operations sending NFTs that appear to come from trustworthy sources, designed websites to deceive users, and lastly, the deceptive tactics that lure users into transferring their funds.
Crypto Fraud Cases on the Rise
By now, it should be clearly understood that cryptocurrency frauds are on the rise and generally targeting naive consumers. However, it is also important to note that there have been more stringent regulations against them.
Recall that the United States Department of Justice established a specialized unit last year with over 150 federal prosecutors to combat the use of cryptocurrency in crimes including money laundering and terrorism financing as well as other unlawful actions related to cryptocurrencies.
Also, reports from blockchain security firm peckShield revealed that Jimbos protocol fell victim to a devastating attack resulting in a loss of 4090 Ether worth $7.5 million. Unfortunately, this exploit happened three days after the launch of its highly anticipated V2.