A growing wave of crypto scams is targeting users through fake Web3 startups, silently infiltrating wallets and draining funds—according to a new report by Chain Retrieval. These fraudulent projects are luring users by posing as legitimate blockchain startups, offering free airdrops, fake NFTs, or beta access to decentralized apps (dApps). But once connected, they exploit wallet permissions to take control of user assets.
These scams are becoming more sophisticated and widespread. What looks like an exciting new Web3 project often turns out to be a front. Once users interact with these platforms—by claiming tokens or signing smart contract prompts—the scammers gain access to wallets and siphon off assets over time.
Chain Retrieval’s research shows that many of these fake startups operate under convincing branding. They use slick websites, fake whitepapers, bot-generated social proof, and even impersonate real developers to build trust in crypto communities like Discord, Telegram, and Twitter.
Users are often unaware that they’ve granted unlimited approval for smart contracts to move tokens on their behalf. Scammers exploit these approvals to slowly drain wallets without raising red flags.
How These Fake Startups Are Tricking the Web3 Community
These scams follow a similar pattern:
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Build a convincing Web3 front – The fake startup mimics a DeFi, NFT, or GameFi project.
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Create hype via giveaways – Airdrops, whitelist access, or early NFT mints are promoted.
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Request wallet connection – Users connect MetaMask or similar wallets to participate.
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Exploit token approvals – Hidden permissions allow the scammer to access user funds anytime.
The damage isn’t always immediate. Some users lose funds weeks after connecting to these dApps, making it harder to trace the source of the theft.
According to Chain Retrieval, at least 50 such fake projects have surfaced in the past three months, draining an estimated $4.2 million worth of assets across multiple blockchains, including Ethereum, BNB Chain, and Polygon.
Security experts are now urging users to take extra precautions:
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Always check dApp permissions via tools like Revoke.cash
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Avoid connecting wallets to unknown projects, even if recommended by community members
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Verify startup legitimacy via GitHub activity, team transparency, and smart contract audits
These scams underline the growing need for decentralized security awareness. As Web3 grows, so do its vulnerabilities.
Meanwhile, efforts are underway within the Ethereum ecosystem to introduce safer wallet standards that give users more visibility and control over permissions before signing.
Until then, users are advised to treat every wallet connection as a potential risk. Just because a project looks real doesn’t mean it is.
📌 In crypto, connecting your wallet is like handing over your keys—do it wisely.