MakerDao Web3 DeFi Phishing

Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' section to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!

MakerDAO

It is incredibly easy for malicious actors to create web applications which look identical to a major smart contract. The URL may be different by a single character, and only the center of the wallet address could be different.

At least $100k USD has been scammed through this method.

This is a global/international case not involving a specific country.

About MakerDAO

"It was only a matter of time before phishers took attacks against the crypto industry a step further by integrating their attacks with the web3 ecosystem. Up until this point, phishers have focused on gaining access to users’ seed phrases, private keys, or usernames and passwords. Today, that changed. A world of DeFi applications, which only interact with a user via their wallet and never require a user to enter credentials, recovery phrases, or passwords into them are now being targeted. These new attacks are beginning to exploit the tools that we use to interface with our crypto."

"Our analysts first became aware of the MakerDAO phish after receiving a community report for makerdao[.]tools on 14 January. The fraudulent website mimicked the process of converting SAI to DAI."

"This domain hosted a simple interface that indicated you would be initiating a 1:1 conversion from Single-Collateral DAI (SAI) to the new DAI — just like the official bridge. However, the transaction you would actually sign would simply send SAI to an address owned by the attackers."

"The malicious Web3 applications "phishing dapps" were discovered in a recent study, they pretend to be legitimate applications or services to steal cryptocurrencies. For example, since MakerDAO officially closed the single-mortgage Sai system, such phishing tools have begun to appear, and they pretended to need a new tool to help users migrate from SAI to DAI. For example, a domain name provides a simple interface to start the migration from SAI to the new DAI at a 1:1 ratio, it seems like an official channel. However, the actual transaction to be signed simply sends the SAI to an address owned by the attacker. SAI, which has been traced to more than US$100,000, was transferred to the attacker's account."

"This iteration of Web3 phishing, at least from the samples we discovered, appears to be run by a group of bad actors. A cluster of them resided on the same infrastructure along with other cryptocurrency scams — 198.54.120.244. This appears to be a shared web hosting server offered by Namecheap, but due to the overlap in content and method of attack, it is safe to assume the campaigns are being run by the same actors."

"Deleted the links. They scammed for 36,166 USD so far already. Is there anything we can do to stop this?" "Please report to Ethereum Scam Database, so it will be blocked by Metamask and hopefully others."

"Crypto is a high value target for criminals and as such we can expect an immense amount of resources to be thrown into developing new attacks to target its users. We can already see the first moves being made by phishers, so it’s important that we stay ahead of the curve. Good UX design, user education, and security-minded development all contribute to this."

"Given the amount of tech and the speed at which it is changing, your average user is going to have a hard time staying on top of how to avoid being phished. In web2.0, we saw this being an issue when for years users were told to look for the green padlock on a site. Then, phishers started using HTTPS and all of a sudden that check failed."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - MakerDao Web3 DeFi Phishing

Date	Event	Description
June 25th, 2020 12:00:00 AM	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost has been estimated at $100,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Prevention Policies

With centralized platforms, phishing attacks increase in difficulty significantly. The platform has the ability to seek email confirmation, perform two factor authentication, and institute delays on key activities like withdrawals, all of which would increase the likelihood of the phish being discovered and prevented before completion.