Stolen Cryptocurrency Amounting to $908K in USDC, 458 Days Post Approval Serves as a Reminder: Focus on Your Digital Wallet Security!
In a chilling reminder of the ever-present threat of cybercrime, a seasoned cryptocurrency user recently fell victim to a wallet-draining scam that cost them $908,551 in USD Coin (USDC). The scam, which traced back to an ERC-20 approval made on April 30, 2024, demonstrated the long-term risks associated with old and forgotten wallet approvals[1][2].
This incident serves as a stark reminder that old approvals, once granted, do not expire automatically and can remain valid indefinitely unless explicitly revoked or replaced by the wallet owner. These token approvals are permissions that allow smart contracts to transfer tokens on the user’s behalf without the need for further confirmations[3]. Once granted, the smart contract retains the right to move tokens until that approval is canceled or changed by the user.
The scam, which exploited a malicious contract, was likely approved through a fake airdrop or a phishing site. The malicious contract allowed token transfers without further user confirmation, making it easier for the scammers to drain the user's wallet[4].
The compromise was not immediately detected. The theft occurred 458 days after the user unknowingly approved the malicious transaction. The scammer waited nearly 16 months before executing the final blow on August 2, 2025[1].
The victim moved $762,397 USDC from MetaMask to a new wallet (0x6c0eB6) at 8:41 PM UTC on July 2. The victim also transferred an additional $146,154 from a Kraken account at around the same time[2]. The stolen funds were sent to an address labeled Fake_Phishing322880, which has been flagged as malicious by Scam Sniffer[6].
This incident underscores the importance of regularly reviewing and revoking these approvals for wallet security. Old or forgotten approvals can be exploited by attackers if the approved contract turns malicious or the wallet is compromised. Revoking token approvals may incur gas fees, but it limits potential exposure and asset loss[1][2].
Recent improvements like EIP-2612 (ERC-20 Permit) introduce approvals with expiration times and unique nonces for better security and reduced gas costs[5]. However, many tokens and wallets still use traditional infinite approvals, so manual review remains essential.
In light of this incident, it is crucial for crypto users to regularly audit and cancel unnecessary or old approvals to protect their funds from delayed exploits and scams. As demonstrated by this case, even experienced users like cybersecurity analyst Christopher Rosa have fallen victim to phishing scams[7].
Sources:
- Galaxy
- Etherscan
- ERC-20 Token Standard
- Malicious Contract
- EIP-2612
- Scam Sniffer
- Cybersecurity Analyst Christopher Rosa
- Crypto users should be aware that old token approvals remain valid indefinitely unless revoked and can lead to significant financial loss, as seen with the loss of $908,551 in USD Coin (USDC) by a experienced user who fell victim to a wallet-draining scam.
- Smart contracts retain the right to move tokens once granted permission, and malicious contracts can be approved unknowingly through fake airdrops or phishing sites, as in the case of the malicious ERC-20 contract which drained the user's wallet without further confirmation.
- To avoid potential exposure and asset loss, it is recommended for crypto users to regularly review and revoke unnecessary or old token approvals, as the compromise of an old approval can lead to delayed exploits and scams, as evident in the incident involving cybersecurity analyst Christopher Rosa.
