Ethereum hacked to steal millions from users across the world

Hackers have been observed abusing a feature in the Ethereum blockchain to trick victims into sending money. 

In the last six months, the criminals were able to trick almost 100,000 people into giving away a total of $60 million, according to a new report from Scam Sniffer. 

As per the report, the hackers used a function called Create2, an opcode that allows users to predict the address of a contract before it is deployed on the Ethereum network. In other words, hackers can create temporary addresses for each individual transaction - addresses that greatly resemble the ones where the victims intended to send the funds. The scheme is dubbed “address poisoning”.

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Bypassing security

Most users, before sending any funds, do two things: 1) they double-check the recipient’s address to make sure they’re sending the money to the right place; 2) they send a small transaction first to make sure everything works, before sending the remaining funds. However, as the addresses are a long string of seemingly random characters, most users just cross-check the first and last few characters, instead of comparing the entire strings. 

By creating an address that differs in just a few characters, the attackers can trick people into thinking the address is valid, before sending the funds. That, however, still leaves the second failsafe - the test transaction. Criminals are working around this by forwarding the test transaction to the actual address. 

The lookalike addresses don’t belong directly to a wallet controlled by the attackers, but are rather a smart contract that then transfers the funds to the final destination. The researchers said they observed multiple cases of fraud leveraging Create2, with one victim losing up to $1.6 million.

Users are advised to thoroughly check the entire address before sending the funds, and not just first and last characters.

Via BleepingComputer

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