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Common Types of Crypto Theft and How to Protect Against Them
Beginner
2025-07-18 | 10m
Web3 opens the door to financial freedom and groundbreaking innovation, but it also introduces new security risks. This article breaks down the most common ways users fall victim to asset theft, from private key leaks and malicious signature approvals to transfer fraud and other attacks. Here, we share real-world case studies and provide an overview of CoinCatch's protective measures, aiming to equip users with the knowledge they need to better safeguard their digital assets in the blockchain ecosystem.
Broadly the Risks Fall in to the Following Categories:
1. Fake Exchange/Wallet Apps: The Silent Drain
Cybercriminals publish near-identical clones of legitimate apps on Google Play/App Store, often using typosquatting (e.g., "CoinCatch's" instead of "CoinCatch"). Once installed, these apps prompt users to enter seed phrases under pretexts like "wallet migration" or "security upgrades," transmitting data directly to hackers. In 2024, a fake Trezor app stole $4.3M before removal.
Attackers often pose as official team members or admins on platforms like Telegram or Discord as well. They send phishing emails or share fake wallet download links, often disguised as "security updates" from trusted names like MetaMask or Trust Wallet. Some even run ads on search engines to direct users to phishing sites. Once victims install these fake apps and enter their seed phrases or private keys, the information is immediately sent to servers controlled by the attackers.
2. Malicious Authorization Fraud
Airdrop phishing
Scammers promote fraudulent token distributions requiring victims to connect wallets to "claim" rewards. Hidden malicious contracts then trigger unlimited withdrawal approvals. A recent Solana-based "NFT airdrop" emptied 1,200 wallets in 72 hours.
eth_sign scams
eth_sign is a basic Ethereum signing method that allows users to sign arbitrary data. The problem is, users only see an unreadable string of hexadecimal code, so they often have no idea what they're actually signing. Attackers exploit this by tricking users into signing malicious approvals — sometimes even granting full access to their assets.
Permit2 signature phishing
Permit2, a token approval protocol developed by Uniswap Labs, is secure by design but has been exploited in phishing attacks. Attackers trick users into signing Permit2 authorizations under the guise of wallet verification or airdrop claims. Once signed, the attacker can move the user's tokens without needing any further permissions.
Token authorization scams
Some malicious websites convince users to grant unlimited authorization for valuable tokens to a smart contract, allowing the site to manipulate their holdings. These sites often pose as legitimate DeFi or NFT platforms, and require user authorization for participation. Attackers create urgency through fake limited-time offers or promotions to lower user defenses. Once authorized, they can withdraw the victim's tokens without further confirmation.
NFT authorization scams
Some malicious sites prompt users to grant setApprovalForAll permissions on their NFTs. If approved, the attacker gains full control of the user's NFT collection and can transfer assets at any time without further action.
3. Impersonation Scams: Wolves in Support’s Clothing
Using leaked user data, fraudsters pose as customer support via SMS/email/Discord, claiming "suspicious activity detected." Victims are directed to fake login portals or tricked into sharing 2FA codes. Binance reported 500+ daily impersonation attempts in Q1 2024.
4. Deepfake Pump-and-Dumps: AI-Powered Fraud
Scammers use AI tools like DeepSwap to create fake videos of celebrities (e.g., Vitalik Buterin) endorsing fraudulent tokens. Coordinated Twitter/Telegram campaigns create FOMO, causing price spikes before rug pulls. A recent deepfake "Elon Musk" livestream stole $2M.
5. User Operation Flow Hijacking
Entry poisoning
Fraudsters bid on keywords like "MetaMask download" or "Uniswap support" to place fake ads atop search results. These lead to phishing sites capturing keystrokes or installing malware. Google removed 5,200 crypto scam ads in March 2024 alone.
Communication poisoning
Some attackers distribute tampered versions of messaging apps such as Telegram through unofficial sources. These modified apps contain malicious code that monitors chats and replaces any crypto wallet addresses shared. When users copy a wallet address from a chat to send funds, they may unknowingly send the funds to the attacker's wallet instead. In 2023, over 500 users lost around $8 million in crypto by unknowingly transferring funds via a tampered version of Telegram.
History poisoning
Attackers exploit a behavior in the USDT transferFrom function that allows zero-value transfers without requiring the sender's approval. This enables them to initiate TransferFrom operations on active user accounts and flood their transaction history. As some users often copy wallet addresses from their own transaction history, they may accidentally reuse an attacker’s address and send funds to the wrong recipient. According to SlowMist, over $20 million was stolen through this method in the first half of 2022 alone.
6. Romance Scams ("Pig Butchering"): Emotional Engineering
Criminals build months-long relationships on dating apps, then introduce "can’t-lose" crypto opportunities. Victims deposit funds to fake platforms showing fake profits until withdrawals are blocked. Estimated losses: $3B+ since 2021.
7. Frontend Hijacking
Attackers hack into the official website CDN or hijack DNS, display a fake wallet login box to steal mnemonics.
Case: In 2024, Curve's official website was hijacked, and users lost $6.1 million.
✅ Defense: Use Bookmark login + hardware wallet secondary confirmation.
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Cross-chain bridge oracle attack
Forge cross-chain transaction data packets to trick users into signing "asset cross-chain" but actually transfer to the hacker's address.
✅ Defense: Manually verify the cross-chain contract address + small test transactions.
CoinCatch's Security Measures
Most assets are stored in cold wallets
Most digital assets on CoinCatch are stored in offline, multi-signature cold wallets. This cautious approach of keeping wallets disconnected from the internet significantly reduces the risk of cyberattacks.
Official verification channel
To help users avoid phishing and scams, CoinCatch offers
an official verification channel. You can use it to confirm whether an email, webpage, or social media account is genuinely from CoinCatch.
Security education
CoinCatch regularly shares educational content to raise awareness and help users strengthen their security knowledge and practices.
Anti-Scams Practices for Users
Protecting your seed phrases and private keys
Never upload your seed phrase or private key to cloud storage without encryption.
Avoid copying your seed phrase or private key in full to the clipboard, as malware may capture it.
Only download wallet apps from official sources, and always verify the publisher and software signature.
Signature and authorization management
Never sign anything that you don't fully understand and always review the contents carefully before signing.
Set a minimum necessary authorization limit for unfamiliar projects instead of granting unlimited access.
Use authorization management tools (e.g., Revoke.cash) to regularly check and revoke unnecessary authorizations.
Safe transfer practices
Before making any large or important transfers, always test with a small amount.
Save frequently used wallet addresses in the address book.
Final thoughts
Protecting digital assets requires joint efforts. While exchanges like CoinCatch build comprehensive security frameworks, users must also stay vigilant and informed. Traditional finance took centuries to develop secure practices. Similarly, Web3 is still evolving. Each security incident offers valuable lessons. CoinCatch remains committed to investing in platform security and expanding educational content to help users strengthen their defenses. We believe that the platform and users must work together to create a truly secure and trustworthy Web3 ecosystem, where blockchain innovation can flourish while minimizing risks.
CoinCatch Team
Disclaimer:
Digital asset prices carry high market risk and price volatility. You should carefully consider your investment experience, financial situation, investment objectives, and risk tolerance. CoinCatch is not responsible for any losses that may occur. This article should not be considered financial advice.
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