$11M Lost in Permit Signature Scam: Security Experts Urge Caution with Off-Chain Transactions

• A user lost $11 million in a phishing attack due to signing multiple fraudulent Permit signatures.
• Permit signatures, enabled through EIP-2612, allow off-chain transaction authorization, posing significant security risks.
• Security firms highlight the need for caution with Permit signatures and recommend using security extensions for protection.

In a recent incident, a user suffered a significant financial loss due to a phishing attack. The user lost $11 million worth of aEthMKR and Pendle USDe tokens after signing multiple Permit phishing signatures. This event shows the growing risks associated with digital asset security.The victim, who is a MakerDAO governance delegate, fell prey to the attack by unknowingly signing fraudulent Permit signatures.

Permit Signature Risks

The incident highlights the vulnerabilities associated with Permit signatures, a feature enabled through EIP-2612. This feature allows users to authorize transactions without prior on-chain approval, which can be exploited by malicious actors. The risk is heightened because the signature authorization happens off-chain, making it challenging to detect compromised signatures.

Analysis by Security Firms

Arkham Intelligence and blockchain security firm SlowMist have both analyzed the incident. According to SlowMist, Permit signatures pose significant risks as they can be easily exploited by bad actors. SlowMist noted that some wallets decode and display signature information to help users identify phishing attempts. However, there is often insufficient warning about the risks of Permit signature phishing.

Preventative Measures

Users are advised to exercise caution when interacting with smart contracts and signing off-chain signatures. Installing security extensions, such as those recommended by Scam Sniffer, can enhance protection against phishing attacks. Additionally, users should verify the legitimacy of websites and smart contracts before signing any Permit signatures.

Read CRYPTONEWSLAND on google news

This incident is a reminder of the importance of security in the digital asset space. As the use of smart contracts and digital tokens continues to grow, users must remain vigilant and take necessary precautions to protect their assets from phishing attacks and other forms of cyber threats.

Read also

• Crypto Clients Scramble as Signature Bank Deadline Looms
• Signature Bank Halts crypto transactions under $100,000: Binance
• FDIC Bans Crypto Support by Failed Banks: Signature Bank Crypto Partners Now in Jeopardy
• Vitalik Buterin Proposes Ethereum PoS Enhancement for Efficiency
• Google to Permit Bitcoin ETF Advertising from Jan 2024