Ethereum’s "Permit" Feature Exposed as Phishing Weapon of Choice

A crypto whale lost $6.28 million in staked Ethereum (stETH) and Aave-wrapped Bitcoin (aEthWBTC) after falling victim to a phishing scheme on September 18, 2025, according to reports from blockchain security firm Scam Sniffer. The attacker exploited the “Permit” signature feature—a mechanism designed to streamline token approvals—by disguising the malicious activity as a routine wallet confirmation. This allowed the phishing scheme to bypass typical red flags, as the transaction did not require gas fees, leaving the victim unaware until the assets were already transferred.

The Permit exploit is a growing concern in the Ethereum ecosystem. Originally created to simplify token approvals and reduce on-chain congestion, Permit signatures now pose a security risk when misused. Scammers combine Permit with the TransferFrom function to drain assets directly. Because the approval occurs off-chain, users only notice the activity when the funds are already in the attacker’s possession. This method eliminates the need for complex hacks or high-cost gas strategies, making it a cost-effective and increasingly popular tactic for malicious actors.

According to Scam Sniffer, the incident is part of a broader trend of rising phishing losses. In August 2025 alone, phishing attacks targeting Ethereum users resulted in $12.17 million in losses, a 72% increase compared to the previous month. Over 15,230 victims were affected, with three large accounts accounting for nearly half of the total losses. This surge underscores the growing sophistication of phishing techniques, which now include EIP-7702 batch-signature scams and direct transfers to malicious contracts.

Security experts have highlighted the dangers of granting unlimited permissions to wallet requests, particularly in the context of DeFi and staking platforms. Yu Xian, founder of SlowMist, emphasized that the victim in this case did not perceive the risk because the transaction seemed harmless. “From the victim’s perspective, he just clicked a few times to confirm the wallet’s pop-up signature requests, didn’t spend a single penny of gas, and $6.28 million was gone,” he noted. This case illustrates how even experienced users can be deceived by seemingly innocuous prompts.

The increasing frequency and scale of phishing attacks in the Ethereum ecosystem raise concerns about the adequacy of current security measures. Despite the surge in losses, there have been no significant regulatory actions or institutional responses to date. However, reports indicate that AI-enhanced scams, such as deepfake voice phishing (vishing), have seen a 1,600% increase in early 2025. This evolving threat landscape highlights the urgent need for better user education and more robust technical safeguards.

As phishing attacks become more sophisticated, users are advised to scrutinize all wallet confirmations and avoid granting unrestricted permissions. Security experts recommend reviewing and revoking token approvals on relevant protocols and using hardware wallets to store large holdings. Additionally, monitoring on-chain activity through blockchain explorers and whale-tracking tools like Whale Alert can help detect unusual transactions before significant losses occur.

The incident serves as a stark reminder of the vulnerabilities inherent in the DeFi and staking ecosystems. While these platforms offer financial innovation and accessibility, they also expose users to heightened risks if not approached with caution. As the crypto industry continues to evolve, the balance between convenience and security will remain a critical challenge for developers, regulators, and users alike.