rewrite this title Crypto Scammers Target Phantom Wallet with Deceptive Security Alerts

by
Victoria d’Este

Published: February 07, 2025 at 10:20 am Updated: February 07, 2025 at 10:20 am

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February 07, 2025 at 10:20 am

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Cryptocurrency users continue to face security risks as scammers refine their strategies to exploit flaws in digital wallets. Recently, attackers have targeted Phantom, a Solana-based wallet, with phishing techniques intended to trick users into handing over their private keys. These fraudulent assaults depend on fake pop-up windows that imitate official update requests, duping innocent users into compromising their finances.

Security experts at fraud Sniffer, a Web3 fraud detection software, discovered this technique and warned about its possible consequences. According to their findings, criminals link to legitimate Phantom wallets and display deceptive pop-ups urging users to authorize a fraudulent “update extension” signature request.

The assault occurs in many steps, beginning with the initial contact, which seems to be a standard update request. If a user follows with the request, they will be prompted to provide their seed phrase, which is their wallet’s important recovery key. Submitting this word gives the fraudsters complete access to the wallet, allowing them to withdraw all assets from the account.

In late January, Scam Sniffer uncovered another iteration of this phishing approach in which consumers received pop-ups on fake websites that looked identical to Phantom’s legitimate interface. These fraudulent prompts asked users to enter their seed phrase under the cover of validating their wallet connection.

How to Spot and Avoid Malicious Pop-Ups

Recognizing harmful pop-ups is difficult, but Scam Sniffer has published some tips to assist consumers in spotting fraudulent behavior. One distinctive aspect of fake websites is that they frequently disable right-clicking, preventing visitors from inspecting links or accessing further browser settings. In contrast, legal Phantom wallet pop-ups do not impose these limitations, enabling basic browser functionality to work normally.

Scam Sniffer also recommends that people examine the URL while dealing with Phantom-related pop-ups. Official Phantom wallet prompts include “chrome-extension” in the URL, which fraudulent websites cannot imitate.

The Phantom wallet has witnessed a significant increase in usage, correlating with the rising popularity of Solana-based assets. According to DeFiLlama statistics, Phantom’s 24-hour revenue from transaction fees has surpassed Coinbase Wallet’s daily profits by around $470,000. 

Photo: DeFiLlama

On January 19, the platform’s income reached an all-time high of $3.6 million, demonstrating its rising user base and significance in the crypto industry. As of 2024, Phantom has surpassed 10 million monthly active users and has processed more than 850 million transactions. This spike in use has made the wallet an appealing target for scammers looking to take advantage of the platform’s big and active user base.

Growing Cybersecurity Risks in Crypto

The growing number of scams mirrors larger security issues in the crypto business. As digital assets become more popular, attackers refine their strategies for exploiting consumers’ faith in established platforms. Phantom’s success has corresponded with an increase in phishing efforts targeting its users.

To reduce these dangers, security professionals underline the importance of checking update requests before taking any action. Users should constantly check update alerts with official Phantom announcements before reacting to unusual requests. Wallet extensions should only be updated through legitimate channels, such as the Chrome Web Store or other trusted sources, rather than depending on in-browser alerts that might be manipulated by attackers.

Another crucial part of security is the protection of seed phrases. Users should never enter their seed phrase into a pop-up window or provide it in response to an unwanted request. The seed phrase is a cryptocurrency wallet’s ultimate access key, and exposing it compromises the wallet’s security completely.

Phantom has noted the increase in phishing attempts and is continuing to adopt security measures to safeguard its users. The platform has given materials for identifying and avoiding fraud, emphasizing the need for security best practices. Scam Sniffer’s analysis has also helped educate the community by providing real-time alerts on developing concerns. Their suggestions include monitoring browser behavior, examining URLs, and avoiding interactions with questionable pop-ups.

The Next Phase of Cryptosecurity and User Privacy

In addition to addressing external security risks, Phantom has expanded its offerings to improve user experience and platform security. On February 6, the wallet added multicurrency capability, which allows transactions in 16 different currencies.

This expansion demonstrates Phantom’s continued commitment to growth while also meeting the changing demands of its customers. Earlier this year, Phantom closed a $150 million Series C fundraising round headed by Sequoia Capital and Paradigm, valuing the firm at $3 billion. These achievements highlight the platform’s resilience and ambition in the face of security problems.

The surge of phishing attempts targeting Phantom Wallet users shows that cybersecurity is still a key concern in the cryptocurrency business. Scammers are constantly evolving their strategies, exploiting new weaknesses, and using creative deception techniques to steal money. The rising frequency of these frauds emphasizes the need for constant monitoring and user education. Individuals should exercise caution when dealing with pop-up prompts, confirming their validity through several security checks before proceeding.

About The Author

Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.

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Victoria d’Este