Trader Loses $119,000 in WBTC Phishing Attack Exploiting ERC-20 Approval Function

A trader has suffered a $119,000 loss in Wrapped Bitcoin (WBTC) following a sophisticated phishing attack exploiting the "Increase Approval" function of ERC-20 tokens. The incident, reported by crypto news outlets, highlights vulnerabilities in decentralized finance (DeFi) ecosystems and the rising threat of social engineering tactics targeting retail investors. Unlike traditional hacking methods, the scam involved tricking the victim into authorizing excessive spending permissions, enabling the attacker to drain the WBTC holdings [1].

The attack mirrors broader trends in crypto-related fraud, with phishing scams increasingly leveraging technical complexity to bypass user defenses. Experts note that such schemes often rely on subtle manipulations of user interface elements or malicious links embedded in seemingly legitimate platforms. The lack of official statements from WBTC custodians or security firms underscores the fragmented response to these threats, leaving users to navigate mitigation strategies independently [1].

While the loss is significant for an individual, it does not currently reflect systemic market risks. Phishing attacks typically cause isolated damage unless scaled to a critical mass of victims. However, the cumulative impact of such incidents—exceeding $340 million in losses in early 2025 alone—has prompted calls for stricter wallet security protocols and user education [1]. Analysts emphasize the need for multi-layered defenses, including hardware wallets and transaction verification tools, to counter evolving phishing vectors [1].

The case also raises questions about the inherent risks of ERC-20 tokens, which are designed for interoperability but lack built-in anti-phishing measures. Address Poisoning attacks, a related threat, have further exposed the fragility of blockchain infrastructure in the face of malicious intent. Investors are increasingly advised to scrutinize transaction approvals and avoid engaging with unverified smart contracts [1].

Sources caution that the absence of regulatory frameworks in many jurisdictions exacerbates the problem, creating a vacuum where attackers can operate with relative impunity. The incident serves as a stark reminder of the dual-edged nature of crypto innovation: while it democratizes access to financial tools, it also introduces new vulnerabilities for unprepared users [1].

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Source: [1] Trader Loses $119K in WBTC Phishing Scheme (https://coinmarketcap.com/community/articles/688924b131246d0e3959fcc5/)