Victims lost $374.6m to approval phishing scammers from January to November, Chainalysis has revealed.

In a preview of its upcoming ‘2024 Crypto Crime Report,’ the blockchain firm noted that the last two years have seen a significant growth in approval phishing, with victims losing $516.8m in 2022.

It explained that approval phishing differs from other crypto scams because scammers trick victims into sending them cryptocurrency, usually through a phony investment opportunity or by impersonating somebody else.

It stated, “But in an approval phishing scam, the scammer tricks the user into signing a malicious blockchain transaction that gives the scammer’s address approval to spend specific tokens inside the victim’s wallet, allowing the scammer to then drain the victim’s address of those tokens at will. Some victims have lost tens of millions to these scams. It is important to note that in general, approval phishers send the victim’s funds to a separate wallet from the one granted approval to make transactions on the victim’s behalf.”

The firm highlighted that suspected approval phishing revenue peaked in May 2022, but has continued to sustain momentum in 2023.

It continued, “Like many forms of cryptocurrency-based crime, the vast majority of approval phishing theft is driven by a few highly successful actors.”

The firm’s breakdown revealed that the most successful approval phishing address may have stolen $44.3m from thousands of victim addresses, representing 4.4 per cent of the total estimate stolen during the period studied.

It added, “We believe that the industry can address the approval phishing scam problem in a variety of ways, from user education to employing pattern recognition tactics similar to those we used to compile this data.”