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Inside Inferno Drainer: the New Crypto and NFT Phish Scam

The infamous ‘scam as a service’ Inferno Drainer claimed almost $6 million in various cryptocurrencies and NFTs within the past few weeks.

Web3 scam detector firm Scam Sniffer has reported that a new ‘scam as a service’ called Inferno Drainer has allegedly stolen almost $6 million from unsuspecting crypto users – and from popular brands and products.

Scam Sniffer, which specialises in identifying scams within Web3, analysed off-chain and on-chain data on various chains including Ethereum, Arbitrum, and BNB Chain.

The Dune dashboard compiled by Scam Sniffer shows data from the multi-chain scam, where  4,888 victims have collectively lost over $5.9 million in cryptocurrencies and NFTs. 

A big chunk of the victims affected were on Ethereum: approximately 1,699 ETH has been reported to be stolen, with the amounts distributed across five different wallet addresses, each holding between 300 and 400 ETH.

It is thought that those involved in Inferno Drainer were part of a larger group, as a suspected member of the phishing group named “Mr Inferno” appeared in a Scam Sniffer Telegram group.

Soon after, Scam Sniffer discovered a website promoting the scammer’s services. “We have a product that provides Web3 malicious website scanning service for platforms, so we identify a lot of malicious websites,” wrote Scam Sniffer. “The Telegram channel helped us connect them together.”

Inferno Drainer has advertised that it will provide ready-to-go code for scammers, letting them steal crypto in exchange for a 20% to 30% cut from the crypto “loot” that they have stolen. The scammers then use the malicious software to create fraudulent websites.

The 30% cut offer was only selectively offered to “good customers”, or those who the scammers saw to have significant potential for turning a huge profit.

According to on-chain data, the operation has been going on since March 27, with nearly 689 phishing websites created by Inferno. “This is the data we have based on the on-chain activity, but it could have started earlier,” said Scam Sniffer.

“It can be seen as a ‘malware-as-a-service’ product,” they said. “They provide the software and the malicious site hosting, and they charge based on the stolen amount.”

The biggest victim from Inferno thus far has had nearly $400,000 worth of assets stolen – which Scam Sniffer reports that the victim attempted to negotiate with a scammer, offering to let them keep 50% of the stolen assets.

Last month, a similar ‘scam as a service’ product, called Venom Drainer, was circulating. Scam  Sniffer identified the phish, which reportedly drained $27 million from around 15,000 victims – with the top 5 victims losing an accumulated $14 million in total. Venom Drainer created 530 phishing sites which targeted about 170 brands.

Inferno scammers targeted some of the most well-known brands in the crypto ecosystem, such as Pepe, Collab.Land, zkSync, MetaMask, and Nakamigos, among others.

In total, around 220 brands were believed to be used by scammers to deceive users.

As the bear market runs its course, crypto scams are still frequent. A study by blockchain analytics platform Crystal Blockchain revealed that 2022 broke the record for the worst year for crypto fraud: with 120 separate incidents reported, fraud rates rose 28%, compared to 2021.

Despite the jump in frequency, the total amount of assets lost in crypto scams in 2022 was much less than 2021’s – only making up for a half of 2021’s devastating $4.6 billion.  

Crystal Blockchain also reports that breaches in the decentralised finance (DeFi) sector are now the most common type of crypto attack.

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