Crypto Scam Wave Surges as Market Boom Draws Increased Fraud Activity

Amid a bullish trend in the cryptocurrency market, the prevalence of fraudulent decentralized applications (DApps) using the notorious Inferno Drainer tool has surged dramatically.

Web3 security firm Blockaid reports that, as of July 2024, around 40,000 DApps are now utilizing Inferno Drainer. Blockaid’s R&D leader, Oz Tamir, revealed that the rate of new malicious DApps employing this tool has soared, climbing from 800 per week earlier in the year to 2,400 per week.

Inferno Drainer, a phishing tool designed to access crypto wallets by tricking users into authorizing token approvals, had previously been linked to $70 million in theft before supposedly shutting down in 2023. However, it has resurfaced with increased activity this year.

Tamir argues that Inferno Drainer, while sophisticated, is not uniquely effective. He notes that scammers choose tools based on current availability and associated fees, rather than any specific feature of the tool itself.

The rise in Inferno Drainer’s usage reflects a broader increase in scam attempts, which Blockaid attributes to the expanding crypto market. As new investors and significant capital enter the space, attackers are more motivated to exploit vulnerabilities, particularly in emerging blockchain platforms with less robust security measures.