Some lost $ 6.5 million by trying to claim $ 2K of ‘free’ crypto

Of all the confusing aspects of crypto, Air drops can be the most confusing. Airdrops are when tokens are rewarded to crypto traders for free. The value of these air drops can be enormous: In April, Bored Ape Yacht Club owners received a cryptocurrency airdrop worth around $ 100,000 for each monkey nft they owned. Airdrops that sound too good to be true are often legitimate.

But not always.

On Monday scammers done away with $ 8 million in bitcoin and ether after using a successful phishing scheme. The scam centered around Uniswap, a decentralized cryptocurrency exchange where people trade altcoins like Shiba Inu and Avalanche. The scammers promised a free airdrop of 400 Uniswap tokens, worth around $ 2000. A few traders took the bait – linked the wallet to a dubious website – and two victims suffered heavy losses.

More than $ 6.5 million was dropped from one wallet, blockchain analysis firm PeckShield told CNET. Scammers took 2444 ether ($ 2.46 million) and 201 bitcoin ($ 3.96 million) from that wallet. The second wallet lost 834 ether ($ 903,000) and 39 bitcoin ($ 774,000). PeckShield told CNET that there are four more wallets infected by the phishing attack, but that these have not yet been tapped.

As obvious as the fraud may seem, it is rooted in precedent. In 2020, Uniswap sent an airdrop of $ 400 UNI tokens (now worth $ 2,224) to every wallet that had traded on the platform. Crypto whales received air droplets at a number of points in 2021 worth five and even six digits.

Uniswap is a central institution for decentralized finance, or “DeFi”, as it allows players to trade cryptocurrencies through peer-to-peer technology, and avoids government structures that manage typical exchanges such as Binance and FTX. Uniswap was contacted for comment but did not respond immediately.

While cryptocurrencies have taken a dive in recent months – bitcoin and ether are down 51% and 65% respectively in the last 6 months – fraudulent activity has not given up. Hackers lost $ 1.4 million in ether from an NFT lending platform on Sunday, which followed $ 100,000 taken from the NIX market Quixotic at the end of June. In between these two incidents, a hacker stole around $ 8.8 million from Cream Finance, however eventually returned $ 7.1 million of it.

Monday’s scams targeting Uniswap liquidity providers; users who earn interest by depositing cryptocurrency in Uniswap’s system. There are around 230,000 liquidity providers; the bad actors sent fake Uniswap tokens to at least 74,800 of them, according to blockchain security researcher Harry Denley. The name of the malicious token led the victims to a website where they could exchange the new tokens for other cryptocurrencies. Clicking on the link on this site led to infection and drainage of the two wallets.

Sending all the fake tokens cost the scammers $ 9,042 (8.5 ether), Denley said. The lost crypto was first reported as a hack by Uniswap, whose cryptocurrency has a market value of $ 4 billion, before it was discovered to be a socially developed scam.