Crypto User Loses $1.08M in LBTC Phishing Attack; Security Report Shows Rise of Sophisticated Drainers and Physical Threats

Source: CryptoNewsNet Original Title: Unlucky crypto user loses over $1 million in a phishing attack Original Link: According to multiple reports, a crypto user lost approximately $1.08 million worth of Aave-wrapped Ethereum LBTC (aEthLBTC), a tokenized Bitcoin asset on the Aave protocol, in what appears to be a phishing exploit.

The user signed a malicious “permit” signature, which served as an off-chain approval mechanism allowing tokens to be spent without triggering an immediate on-chain transaction. Scammers likely directed the victim to sign the permit via a phishing site or cloned dApp, gaining access to drain the wallet. The attackers rapidly converted the funds to ETH and immediately laundered them through mixing services.

How the Scam Happened

Security researchers noted that the phishing group behind this attack is not one of the “mainstream” drainer groups, suggesting an emergence of smaller, sophisticated independent attackers. The incident highlights a broader trend: while overall crypto phishing losses dropped 83% in 2024—from $494 million to $84 million—sophisticated wallet drainers continue to target high-value holders with permit-oriented attacks, particularly during bull markets.

Permit-based exploits rely on users’ trust in routine signature requests that actually authorize token transfers off-chain. Unfortunately, recovery is nearly impossible since draining happens on-chain and transactions are irreversible.

Phishing Losses Down, But Physical Attacks Up

While phishing losses decreased, security experts report a concerning rise in so-called “$5 wrench attacks”—physical assaults on crypto holders to coerce them into surrendering assets. In 2025, roughly 60 reported physical assaults occurred, up from 41 in 2024 and 36 in 2021. However, experts believe the actual number is significantly higher, as many incidents are logged as simple robberies or burglaries without the crypto element, or go unreported entirely.

These attacks present a unique risk beyond technical vulnerabilities—they endanger lives and require security practices beyond wallet management. “No matter how many technical precautions you take or how many factors you authenticate with, no individual is immune to human attack vectors,” noted security experts.

The true scope of wrench attacks remains difficult to quantify, but the trend suggests either higher victimization risk or greater awareness of the threat. High-profile cases, such as the kidnapping and torture of a major hardware wallet co-founder and his wife in January, have brought increased attention to this emerging security concern.