Crypto Victim Loses $908K in Sophisticated Phishing Attack: How Dormant ERC-20 Approvals Enable Wallet Draining

A crypto user has suffered a devastating $908,551 loss in an advanced phishing attack more than 15 months after unwittingly signing a malicious ERC-20 token approval. This security lapse, which allowed scammers to siphon funds in a single transaction, underlines the critical importance of routinely managing wallet permissions for anyone active in DeFi and Web3.

How the $908K Crypto Scam Unfolded

The Initial Scam: A Tiny Approval With Huge Consequences

On April 30, 2024, the victim interacted with what was likely a phishing website or fraudulent airdrop campaign, approving the “pink-drainer.eth” scammer’s wallet address (0x67E5Ae) to access tokens in their wallet. Unlike standard transfers, ERC-20 approvals allow an outside address to move your coins at any time until you manually revoke permission. This exploitative smart contract approval quietly lingered, unnoticed, in the victim’s wallet for 458 days.

The Attack: Patient, Targeted, and Devastating

For over a year, the scammer did nothing the compromised wallet held little to no funds. Then, on July 2, 2025, the situation changed drastically: the user deposited $762,397 in USDC from a MetaMask wallet. Ten minutes later, another $146,154 in USDC arrived from a Kraken wallet. Sensing opportunity, the attacker bided their time for the right moment, eventually draining the wallet of its entire balance ($908,551) in a single transaction on August 2, 2025.

This “ice phishing” or dormant approval attack highlights a growing cybercrime trend: hackers patiently monitor approved addresses, striking only when sufficient funds are present to justify risking exposure.

Why Are ERC-20 Approvals So Risky?

• Approvals grant unlimited, ongoing access often for convenience, but also exposing your assets to future theft.
• Most users forget to check or revoke old approvals, especially after using DeFi, NFTs, or airdrop claims.
• Attackers exploit these dormant permissions, waiting for targets to deposit new crypto before executing theft.

How You Can Protect Yourself from Token Approval Scams

1. Regularly Review and Revoke Wallet Approvals

Tools such as Etherscan’s Token Approval Checker, Revoke.cash, MetaMask Portfolio, Approved.zone, and Unrekt allow you to inspect and remove token approvals on Ethereum and most major blockchains. Remember, each revocation requires a small gas fee.

2. Treat Airdrops and Unsolicited Approvals With Extreme Caution

Never approve smart contract permissions from suspicious websites, Discord links, or unknown airdrop offers.

3. Practice Wallet Hygiene

• Segment your assets across multiple wallets: one for interacting with DeFi/dApps/airdrops, one for long-term storage.
• Use hardware wallets for large holdings, though remember that approvals can still let scammers drain funds even from hardware-secured wallets if permissions are granted and not revoked.

4. Stay Up-to-Date on Security Trends

Monitor scams, wallet-draining bots, and phishing campaigns via reputable crypto security analysts and tools like Scam Sniffer, which tracks and reports phishing incidents in real-time.

5. Know the Warning Signs

• Approvals that grant access to “unlimited” or large token amounts.
• Requests for approval from unknown sites or dApps with no clear purpose.

Recent Surge in Crypto Scams

July 2025 alone saw over $142 million lost across 17 hacks in the crypto sector, including the high-profile $44 million CoinDCX exchange hack. This further illustrates how criminals are constantly evolving their methods, targeting both individual users and exchanges with sophisticated, delayed attacks.

Takeaway:
Regularly audit and revoke unnecessary wallet approvals to close the door on this type of delayed, devastating crypto theft. Don’t let old permissions be the silent vulnerability that drains your digital assets months or years later.

“Your wallet security matters. Regularly review and revoke old approvals or hard-earned funds may be at risk.”