Crypto Whale Loses $6M in Permit Phishing Scheme

On September 18, a crypto investor suffered a devastating loss of $6.28 million in staked Ethereum (stETH) and Aave-wrapped Bitcoin (aEthWBTC) after approving malicious signatures in a phishing attack, as detailed by blockchain security firm Scam Sniffer. The attackers cleverly disguised their move as a routine wallet confirmation using ‘Permit’ signatures, which allowed them to bypass on-chain approvals and gas fees. Yu Xian, founder of security company SlowMist, emphasized that the victim perceived no danger, merely clicking through pop-up requests without spending any gas, only to see millions vanish instantly.

Permit approvals, originally designed to streamline token transfers by enabling off-chain authorizations, have inadvertently created a new attack vector. Once a user signs such a permit, attackers combine it with the TransferFrom function to drain assets directly from the wallet. Because the authorization occurs off-chain, wallet dashboards display no unusual activity until the funds are moved, leaving victims with no recourse once the tokens are redirected to the attacker’s wallet. This efficiency makes permit exploits highly attractive to malicious actors, enabling them to siphon large sums without complex hacks or costly gas wars.

This incident is not isolated but part of a broader escalation in phishing campaigns targeting crypto users. Scam Sniffer reported that in August alone, attackers stole $12.17 million from more than 15,200 victims, marking a 72% increase in losses compared to July. Nearly half of August’s damages came from just three large accounts, including one wallet that lost $3.08 million in a single exploit, highlighting how high-value targets are increasingly in the crosshairs.

The surge in losses is largely attributed to the rise of EIP-7702 batch-signature scams and direct transfers to malicious contracts, which amplify the scale and efficiency of these attacks. As phishing methods evolve, security experts warn that crypto users must exercise extreme caution, particularly with wallet requests that grant unlimited permissions. The trend underscores a critical need for heightened awareness and proactive security measures in an ecosystem where innovation often outpaces protection.

In response to the growing threat, security firms like Scam Sniffer and SlowMist are urging users to scrutinize all wallet signature requests and reject those that demand unlimited permissions. Yu Xian’s commentary underscores the psychological trick at play: the absence of gas fees lulls victims into a false sense of security, making them more likely to approve malicious actions without second thought. This tactic exploits human behavior as much as technical vulnerabilities.

To mitigate risks, experts recommend verifying the legitimacy of every request, using hardware wallets for added security layers, and staying informed about emerging scam tactics like permit exploits. As phishing losses continue to climb, the onus is on individual users and the broader crypto community to prioritize security education and tools that can detect and prevent such sophisticated schemes before they result in irreversible financial damage.