- Tether, the issuer of USDT, froze $20 million stolen in a phishing scam involving a zero transfer phishing attack.
- The victim mistakenly sent USDT to a phishing address with identical starting and ending characters.
- Tether’s swift response to freeze the stolen funds raised curiosity about the victim’s identity and the reason behind the quick action.
A recent phishing scam targeted an unsuspecting victim, resulting in the loss of $20 million in USDT. However, Tether’s swift response surprised the community.
Blockchain security firm PeckShield reported a phishing scam that managed to steal $20 million in USDT through a zero transfer phishing attack. The victim intended to send funds to a wallet but mistakenly sent them to a phishing address that looked similar to the intended one.
#PeckShieldAlert A #ZeroTransfer scammer grabbed 20M $USDT from 0x4071…9Cbc.
Intended Address: 0xa7B4BAC8f0f9692e56750aEFB5f6cB5516E90570
Phishing Address: 0xa7Bf48749D2E4aA29e3209879956b9bAa9E90570#Tether $USDT has already added the scammer’s address 0xa7bf…0570 to the… pic.twitter.com/Y0APPTxIrT
— PeckShieldAlert (@PeckShieldAlert) August 1, 2023
The scammer executed a zero-value token transfer from the victim’s address to their phishing address during a previous transaction, aiming to deceive the victim into sending real funds to the spoofed address later. Such attacks exploit users’ tendencies to only verify the first and last characters of an address, making them more vulnerable.
Surprisingly, Tether, the issuer behind USDT, acted swiftly and froze the stolen USDT by adding the scammer’s address to its blacklist. On-chain sleuth ZachXBT, known for investigating and exposing phishing scams, found Tether’s response unusual, questioning the identity of the victim. Twitter users also expressed surprise at Tether’s quick action.
Tether’s decisive move raises questions about the circumstances surrounding the incident. While rival stablecoin issuer Circle has previously frozen transactions at the request of the U.S. Treasury Department, Tether did not follow a similar path.
The incident highlights the need for caution and thorough verification when dealing with cryptocurrency transactions to prevent falling victim to phishing scams. As the crypto space continues to evolve, security measures and user awareness play a crucial role in safeguarding funds and maintaining trust within the community.