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MKR Falls 7% as MakerDAO Delegate Loses $11 Million to Phishing Scam

2 mins
Updated by Lynn Wang
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In Brief

  • A MakerDAO governance delegate fell victim to a sophisticated phishing attack.
  • The incident resulted in the loss of $11 million and led to a 7% drop in MKR's price.
  • This event highlights the persistent threat of phishing attacks within the crypto space.
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MakerDAO’s MKR token witnessed a significant downturn following a governance delegate’s loss of $11 million in digital assets to a sophisticated phishing scheme.

Earlier in the day, blockchain security firm Scam Sniffer reported that a crypto investor was tricked into signing a malicious permit phishing signature. This resulted in the loss of 3,657 MKR tokens, valued at $8.7 million, and 2.56 million PT Ethena tokens, worth $2.4 million.

The Impact on MKR’s Price

An investigation into the victim’s address on the Arkham Intelligence platform revealed its affiliation with a MakerDAO governance delegate. These delegates, elected by the community, represent MKR holders in voting processes.

While all MKR holders can participate in governance, many opt to delegate their voting rights to these representatives. This essentially grants them significant influence on the protocol’s operations and processes.

“This is a real big spender. Three permit offline authorization signatures were stolen by a phishing website, resulting in a loss of approximately $11 million,” Yu Xian, founder of blockchain security firm SlowMist, commented.

Read more: Crypto Scam Projects: How To Spot Fake Tokens

MakerDAO Delegate Phishing
MakerDAO Delegate Phishing. Source: X/SCam Sniffer

Following the theft, the blockchain analytic platform Lookonchain reported that the perpetrator had converted the stolen assets into Ethereum. This action led to a 7% drop in MKR’s price to $2,280. The token has since marginally recovered to $2,374 as of press time.

Etherscan has labeled the exploiter’s address as a phishing wallet. It holds approximately $760,000 in various digital assets.

Meanwhile, this incident shows the ongoing threat of phishing attacks in the digital asset space. Typically, these schemes involve scammers establishing fake social media accounts to impersonate legitimate projects. Subsequently, these accounts, often featuring counterfeit verification badges, lure victims to malicious websites where sensitive information is compromised.

Read more: 15 Most Common Crypto Scams To Look Out For

Last month, Inferno Drainer, a notorious draining-as-a-service (DAAS) provider, resumed operations following a brief hiatus due to heightened demand. This service was implicated in the theft of 1,807 tokens, valued at $6.9 million.

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.