Web3 Security Firm’s Mistake Exposes Users to Wallet Drainer Exploit

A mistake by Web3 security firm Ancilia caused users of Radiant Capital to lose $50M worth of crypto assets to a wallet drainer exploit.

Ancilia’s Blunder Leads to Wallet Drainer

Radiant Capital, a well-known DeFi lender, suffered a major setback when a Web3 security firm, Ancilia, inadvertently led its users to a wallet drainer exploit, causing them to lose $50M.

Ancilia shared a phishing link on X while trying to aid victims of the Radiant Capital exploit. The post directed users to a fake X account pretending to be Radiant Capital, which linked to a wallet drainer where users lost their funds.

The original exploit, which occurred on October 16, targeted Radiant Capital’s smart contracts on BNB Chain and Arbitrum. Attackers exploited the ‘transferFrom’ function to drain over $50 million worth of assets, including WBNB, USDC, and ETH.

Following the incident, Radiant Capital advised its users to revoke wallet permissions using Revoke.cash, a tool that helps disconnect wallets from risky smart contracts.

However, the attackers had already taken control of several private keys before users could implement the suggested procedure. Thus, the hackers gained access to Radiant Capital’s multi-signature wallet, switching ownership of funds to steal them.

Scammers Impersonate Radiant Capital

By impersonating Radiant Capital on X, these bad actors posted fake links disguised to look like the Revoke.cash platform. Ancilia, not realizing the trick, shared one of these fake posts, instructing users to follow the link.

The mistake was quickly spotted by sharp-eyed community members, who pointed out the error. Critics condemned the firm for sharing the malicious link, especially since many users rely on security experts for guidance during such incidents.

Ancilia swiftly deleted the post, issued a public apology, and directed users to the legitimate Radiant Capital account to avoid further damage. One of the major challenges in preventing scams like this is the sophisticated nature of the impersonation.

Scammers often hijack verified X accounts, altering small details in the account name or handle. In this case, the scammers modified Radiant Capital’s name to “Radiarnt Capital” and adjusted the handle slightly to “@RDNTCapitail.”

These minor differences are often overlooked by followers, especially when they are in a rush or anxious about an update regarding their assets.

Phishing Scams in Web3 Space

Phishing attacks through impersonation are not new to the Web3 space. Cybersecurity experts have warned that these tactics are increasingly popular among scammers looking to exploit crypto users.

Earlier in the year, cybersecurity firm SlowMist reported that over 80% of comments under major crypto project posts were promoting various scam projects. Another report from ScamSniffer highlighted that crypto holders have lost millions of dollars worth of their assets through these impersonation tactics.

Notably, Radiant Capital is no stranger to attacks. Earlier this year, the DeFi lender was targeted in a flash loan exploit that resulted in a loss of $4.5 million worth of cryptocurrencies.

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