The Rise of Inferno Drainer: Assisting in Cryptocurrency Theft
Decentralized finance (DeFi) systems and NFT initiatives often fall victim to theft involving cryptocurrencies. Recently, an investigation uncovered the involvement of Inferno Drainer, a scam service provider, in assisting multi-chain schemes in exchange for a portion of the stolen assets. Scam Sniffer, a Web3 security company, revealed that Inferno Drainer has helped steal over $70 million from 103,767 victims across various blockchains.
Inferno Drainer operates as “malware-as-a-service,” allowing malicious actors to extract money from cryptocurrency wallets. Since March 27th, it has set up more than 689 phishing websites targeting well-known cryptocurrency and NFT projects.
Inferno Drainer Shuts Down
In a Telegram post on November 26, Inferno Drainer announced its decision to permanently shut down. However, the servers will continue to run to facilitate users’ transition to another platform.
The exposure of Inferno Drainer began when security enthusiast and anonymous Twitter user 0xSaiyanGod stumbled upon one of its promoters in the fraud Sniffer Telegram channel. After reporting the scammer, an inquiry was launched by the security staff. Using a Permit2 exploit, Scam Sniffer discovered evidence of a $103,000 drain transaction. These phishing schemes rely on an abridged token approval process.
To sustain its wallet draining script, Inferno Drainer charges between 20% and 30% of the total value of stolen assets. Experts estimate that these “drainer fees” have generated approximately $20 million for the platform.
The Extent of Damage and Rumors Dispelled
Scam Sniffer’s investigation revealed that Inferno Drainer is associated with thousands of frauds, resulting in the loss of millions of dollars. By analyzing data from Ethereum, Arbitrum, BNB Chain, and other chains, they identified 4,888 victims who lost nearly $6 million in NFTs and cryptocurrencies combined. More than 220 projects, including popular ones like MetaMask and Optimism, have been targeted by these phishing websites.
Rumors circulated that a Blast protocol pioneer had connections to Inferno Drainer. However, after examining on-chain data, Loch, a blockchain portfolio analytics company, confirmed that there was no real connection between Inferno Drainer and the Blast creator’s address.
The Global Multi-Billion Dollar Enterprise of Crypto Fraud
Scams as services have become increasingly sophisticated in the cryptocurrency ecosystem. Monkey Drainer, a similar service discovered in October, extracted at least $1 million in Ethereum from users before shutting down. Crypto fraud has become a multibillion dollar criminal enterprise globally, with victims experiencing significant losses.
In the United States alone, victims reported losses of $2.6 billion from crypto fraud last year, more than double the previous year’s amount. However, the actual extent of losses remains unknown due to underreporting by victims who often feel embarrassed to report such crimes.
Featured image from Pixabay
Hot Take: The Rise and Fall of Inferno Drainer
Inferno Drainer’s involvement in assisting cryptocurrency theft highlights the ongoing challenges faced by DeFi systems and NFT initiatives. The shutdown of Inferno Drainer is a positive development in combating these scams. However, it serves as a reminder of the growing sophistication and scale of crypto fraud worldwide. It is crucial for individuals and organizations to remain vigilant and take necessary precautions to protect their assets in the decentralized space. The actions of scam-sniffing companies like Scam Sniffer play a vital role in uncovering and exposing these fraudulent activities, making the crypto ecosystem safer for everyone.
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