$284 million evaporated! A comprehensive analysis of the biggest phishing scam in cryptocurrency theft history

In January 2026, the cryptocurrency industry suffered losses exceeding $400 million due to security vulnerabilities, setting a new monthly record. CertiK documented 40 incidents, including a phishing attack on January 16th that resulted in a loss of $284 million (accounting for 71%), where attackers impersonated Trezor customer support to steal recovery seed phrases, stealing 1,459 BTC and 2.05 million LTC.

The Largest Phishing Scam in History: $284 Million Vanishes in an Instant

(Source: Certik)

Among the crypto thefts in January 2026, the most shocking was a social engineering scam targeting hardware wallets. On January 16th, an investor lost $284 million due to a phishing attack, which accounted for approximately 71% of the total adjusted losses for the month, making it the largest single phishing incident in cryptocurrency history.

The attackers’ method appeared simple yet highly effective. They impersonated official customer support for Trezor hardware wallets, contacting victims via phishing emails or messages, claiming their accounts had security issues requiring verification. Under carefully crafted social engineering tactics, victims were induced to reveal their recovery seed phrases. Once the attackers obtained these 12 or 24 words, they gained complete control of the wallet without any technical hacking.

This crypto theft led to the immediate theft of 1,459 BTC and 2.05 million LTC. Based on market prices at the time, the Bitcoin portion was approximately $123 million (calculated at $84,000 per coin), and the Litecoin portion about $161 million (calculated at $78 per coin). Such a scale of theft clearly indicates that the victims could have been early investors or institutions holding large amounts of crypto assets.

Following the Trezor incident, the stolen assets were immediately transferred in large quantities to Monero (XMR). Monero is a privacy-focused token that can obscure transaction history, making fund tracing extremely difficult. This mass transfer triggered an abnormal rise in Monero’s market price, highlighting ongoing challenges regulators face in combating illegal capital flight and money laundering activities using privacy coins.

This case offers a profound lesson: even the most secure hardware wallets are ineffective if user-level security is bypassed. Trezor’s encryption technology was not broken; the problem lay in users handing over the most critical security information—the seed phrase—to attackers. This underscores the human factor in crypto thefts: no matter how advanced the technology, it cannot prevent users from leaking their keys.

Step Finance and Truebit Suffer Major Blows

Besides the Trezor phishing case, January also saw several major smart contract vulnerability attacks. On January 31st, Solana-based Step Finance was attacked for $30 million, with attackers exploiting a “well-known attack vector” to drain multiple treasuries and fee wallets, transferring 261,854 SOL.

Step Finance is an important DeFi platform within the Solana ecosystem, providing asset management and analysis tools. The timing of this theft was highly sensitive, as the Solana ecosystem had just experienced a period of rapid growth with large capital inflows. The attackers clearly targeted the accumulated large assets on the platform.

The phrase “well-known attack vector” itself is highly ironic. It suggests that the vulnerabilities in Step Finance were not new zero-day exploits but well-known weaknesses within the security community. This makes the loss even more regrettable, as it could have been prevented through timely security audits and patches.

Truebit reported a loss of $26.6 million due to an overflow vulnerability, making it the largest direct attack on the protocol code that month. Overflow vulnerabilities are classic weaknesses in smart contracts; when numerical values exceed the maximum storable value, abnormal behavior occurs. Attackers can exploit this to mint excess tokens, bypass balance checks, or execute unauthorized transfers.

Top Crypto Theft Losses in January

Trezor Phishing: $284 million (71%)

Step Finance: $30 million

Truebit: $26.6 million

Swapnet: $13 million

Saga: $6.2 million

Makina Finance: $4.2 million

These figures reveal an unsettling reality: whether through social engineering or technical vulnerabilities, methods of crypto theft are constantly evolving, and defenses often lag behind.

Human Error and Private Key Leaks Are the Biggest Risks

CertiK’s data shows that 40 recorded crypto theft incidents caused approximately $370.3 million in industry losses. These events demonstrate that human error and private key leaks remain the most significant financial risks facing the emerging industry. Compared to complex protocol attacks, social engineering scams and phishing are harder to defend against because they target human weaknesses.

The incidents this month were not due to sophisticated technical attacks but primarily driven by impactful social engineering scams. This trend warrants vigilance, as it indicates attackers have realized that rather than spending resources cracking encryption, it’s easier to deceive users into handing over their keys. These attacks are low-cost, high-success, and often difficult to trace and prosecute.

Swapnet lost $13 million, while DeFi protocols Saga and Makina Finance lost $6.2 million and $4.2 million respectively. Although these losses are far less than the Trezor case, they are spread across different platforms and protocols, showing that crypto theft threats are systemic rather than isolated incidents.

From a technical perspective, smart contract vulnerabilities continue to cause significant market impacts. Overflow bugs, reentrancy attacks, authorization bypasses, and other classic weaknesses are still being exploited, indicating many projects lack sufficient security auditing. Even audited contracts may harbor undiscovered vulnerabilities within complex interaction logic.

As the industry moves into February, these data points serve as a stark reminder: even the most robust hardware encryption is ineffective if user-level security is bypassed. The Trezor case proves this: hardware wallets are designed to be secure, but once users hand over seed phrases, all technical protections become meaningless.

Key Measures to Prevent Crypto Theft

In the face of increasing threats, both users and platforms must adopt stricter security measures. For individual users, the most critical rule is never to disclose seed phrases or private keys to anyone, regardless of claimed identity. Official customer support will never ask for such information; any such request should be regarded as a scam.

For platforms, regular security audits and bug bounty programs are essential. The “well-known attack vector” exploited in the Step Finance attack could have been discovered and patched through timely security checks. Many successful crypto projects establish continuous security monitoring and collaborate with white-hat hacker communities to identify vulnerabilities before attackers do.

The role of privacy coins like Monero in money laundering has also attracted regulatory attention. While privacy protection is a core value of cryptocurrencies, when used to conceal illegal activities, it faces regulatory pressure. Balancing the need for legitimate privacy with efforts to combat crime remains a difficult challenge for the crypto industry.