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Trader loses $1M after signing phishing token approval
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- DeepHorus
A cryptocurrency trader lost nearly $1 million on Wednesday after falling victim to a phishing token approval scam on the Ethereum blockchain, according to onchain data from security firm Scam Sniffer. The incident highlights the persistent threat of approval phishing, which remains a primary attack vector in the crypto space, contributing to over $14 billion in total scam losses last year. The victim unknowingly signed a malicious token approval, granting scammers unlimited access to their wallet.
Phishing token approval scams involve tricking users into approving transactions that appear innocuous but actually give attackers control over their funds. In this case, Scam Sniffer reported that the scammers initially attempted to drain exactly $1 million via multicall transactions but failed due to insufficient funds. Seconds later, they recalculated and successfully withdrew the victim's remaining balance of 999,999 USDt (USDT) in three follow-up transfers.
The broader context reveals a growing crisis: phishing losses totaled $723 million across 248 incidents in 2025, according to blockchain security firm CertiK. Earlier this month, a similar scam caused a $1.65 million loss after a user connected to a fake exchange. Blockchain analytics firm Chainalysis reported in June that onchain scams have already drained at least $14 billion in 2025, with investment scams dominating, often facilitated by approval phishing.
Social engineering tactics are central to these attacks. Scammers reuse the same wallets and cash-out routes across victims, creating a wider network of fraud. 'Each report exposes a wider network,' said Renato Bastos, senior investigator at Chainalysis. Researcher Ryan Coleman noted that the approval gives attackers unlimited access, enabling automated sweepers to drain funds quickly.
Address poisoning is another related threat, where scammers create similar wallet addresses and send tiny 'dust' transactions to trick users into sending funds to the wrong address. MetaMask, a popular Ethereum wallet, launched live address poisoning detection in June to combat this. Security experts urge users to double-check all signature requests, avoid rushed transactions, and utilize scam detection tools.
Looking ahead, the crypto industry must enhance user education and deploy more robust security measures. As scams evolve, platforms need to integrate real-time alerts for abnormal approvals and collaborate on threat intelligence sharing. The $1 million loss serves as a stark reminder that vigilance is critical in an ecosystem where a single click can drain a lifetime of savings.
