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The Inferno Drainer: An Emerging Threat

The Inferno Drainer: An Emerging Threat

The NFT ecosystem is no stranger to scams and fraudulent activities, but a new player has entered the field, raising alarm bells within the crypto community. It goes by the name of “Inferno Drainer”, and it’s causing quite a stir.

Inferno Drainer is a malicious software provider allegedly linked to thousands of scams resulting in the theft of several million dollars​​. It’s a type of “malware-as-a-service” product that provides the software and malicious site hosting, with charges based on the amount stolen​​. The scammer reportedly charges 20% to 30% of the stolen assets in exchange for their malicious software, which is then used to create fraudulent websites​​.

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Scam Sniffer, a platform specializing in the identification of scams, revealed that by analyzing off-chain and on-chain data on Ethereum, Arbitrum, BNB Chain, and other chains, they identified 4,888 victims who collectively lost over $5.9 million in cryptocurrencies and NFTs due to Inferno Drainer​​. Approximately 1,699 ETH is reported to have been stolen and distributed across five different addresses, each holding between 300 and 400 ETH​​.

The extent of these scams was discovered when a suspected Inferno Drainer member named “Mr Inferno” appeared in a Scam Sniffer’s Telegram group, leading to the discovery of a website promoting the scammer’s services​. Inferno is reported to have created nearly 689 phishing websites since March 27, 2023, but the illicit activities could have started even earlier​​.

Source: ScamSniffer
Source: ScamSniffer

What Projects Are the Main Target?

The scammers targeted some of the most well-known brands in the crypto ecosystem, such as Pepe, Collab.Land, zkSync, MetaMask, and Nakamigos, among others, with a total of about 220 brands believed to have been used to deceive users​​.

The victim who suffered the greatest losses had nearly $400,000 worth of assets stolen. In a desperate attempt, the victim tried to negotiate with the scammer, offering to let them retain 50% of the stolen goods​​.

It’s worth noting that Inferno Drainer is not the first of its kind. Last month, a similar “Scam as a Service” called Venom Drainer was identified by Scam Sniffer, which drained $27M from 15k victims and created 530 phishing sites targeting around 170 brands​​.

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Despite the bear market, crypto scams are still frequent. A recent study by Crystal Blockchain revealed that 2022 emerged as the worst year on record for crypto fraud, with 120 separate incidents reported, representing a 28% increase compared to 2021​​. However, the total value lost across all incidents in 2022 was less than half of that in 2021, when the total funds lost in crypto scams reached $4.6 billion. This decrease can likely be attributed to the ongoing bear market which began in May 2021​​.

While NFT scams are a significant concern, decentralized finance (DeFi) breaches have now emerged as the most common type of crypto attack, according to the same study​​. Nevertheless, Inferno Drainer’s activities serve as a stark reminder of the risks associated with the NFT ecosystem, highlighting the need for increased awareness, robust security measures, and careful due diligence.

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