Uncovering the Inferno Drainer: A New Crypto and NFT Phishing Threat

A novel phishing scam called Inferno Drainer has recently come to light, potentially targeting popular crypto projects on major blockchain networks. But what exactly is this new threat, and how does it operate?

On Friday, Scam Sniffer, a platform dedicated to identifying fraudulent activities, revealed that this malicious software provider is allegedly connected to numerous scams resulting in multi-million dollar losses.

Through an analysis of off-chain and on-chain data across Ethereum, Arbitrum, BNB Chain, and other networks, the security firm identified 4,888 victims who collectively suffered losses exceeding $5.9 million in digital assets and non-fungible tokens.

Reports indicate that approximately 1,699 ETH has been pilfered and distributed among five different addresses, each holding between 300 and 400 ETH.

The scale of these fraudulent activities came to light when a suspected Inferno Drainer member, known as "Mr Inferno," appeared in a Scam Sniffer's Telegram group. This led to the discovery of a website promoting the scammer's services.

In a conversation with Gate, Scam Sniffer explained, "Our product offers Web3 malicious website scanning services for platforms, enabling us to identify numerous malicious websites. The Telegram channel helped us connect the dots."

The scammer allegedly charges between 20% and 30% of the stolen assets in exchange for their malicious software, which is utilized to create fraudulent websites.

Since March 27, Inferno is reported to have created nearly 689 phishing websites. Scam Sniffer told Gate, "This data is based on on-chain activity, but the operation could have commenced earlier."

They further elaborated, "It can be viewed as a 'malware-as-a-service' product. They provide the software and malicious site hosting, charging based on the amount stolen."

The most significant loss was suffered by a wallet that had nearly $400,000 worth of assets stolen. According to Scam Sniffer, the victim attempted to negotiate with the scammer, offering to let them retain 50% of the stolen goods.

Last month, Scam Sniffer identified a similar "Scam as a Service" called Venom Drainer. It drained $27M from 15k victims, with the top 5 victims losing $14M in total. The operation created 530 phishing sites, targeting approximately 170 brands.

Targeted Projects and Industry Impact

The scammers have set their sights on some of the most recognizable names in the crypto ecosystem, including Pepe, Collab.Land, zkSync, MetaMask, and Nakamigos, among others. It is believed that about 220 brands have been exploited to deceive users.

Despite the bear market conditions, crypto scams continue to persist. A recent study by Crystal Blockchain revealed that 2022 was the worst year on record for crypto fraud, with 120 separate incidents reported. This figure represents a 28% increase compared to 2021.

However, the total value lost across all incidents in 2022 was less than half of that in 2021, when the total funds lost in crypto scams reached $4.6 billion. This reduction can likely be attributed to the ongoing bear market that began in May of the previous year.

The same study also highlighted that decentralized finance (DeFi) breaches have now become the most prevalent type of crypto attack.

As the crypto industry continues to evolve, so do the tactics of malicious actors. It is crucial for users to remain vigilant and for platforms to enhance their security measures to combat these emerging threats.