Ethereum’s EIP-7702 Upgrade Exploited by Coin Theft Gangs – Coincu

EIP-7702, recently executed within the Ethereum ecosystem, is under scrutiny after Yu Xian of SlowMist highlighted its usage by coin theft gangs for automatic fund transfers in a social media post.

The upgrade’s initiative, meant to enhance wallet flexibility, now presents unforeseen risks, sparking widespread unease in crypto communities.

97% EIP-7702 Delegations Linked to Theft Contracts

Yu Xian from SlowMist reported on platform X that EIP-7702 is being manipulated by coin theft gangs. Over 97% of delegations within EIP-7702 are tethered to theft contracts, exposing vulnerabilities for users with compromised wallet keys. This widespread misuse of delegations raises significant concerns for the Ethereum community and wallet users, marking an urgent call for action.

The shift impacts financial security in Ethereum network, especially for Ether and ERC-20 token holders, heightening risks through leaked wallet keys and mnemonic misuse. The event underscores weaknesses, prompting heightened vigilance among stakeholders.

“The ‘most High’ users of the new mechanism EIP-7702 are actually coin theft gangs (not phishing gangs), which facilitate the automatic transfer of related funds from wallet addresses with leaked private keys/mnemonic phrases… Over 97% of EIP-7702 delegations are authorized to such coin theft contracts.” — Yu Xian, Founder, SlowMist

Community discussions are active on GitHub and Discord, where security experts emphasize careful authorization and recommend enhanced wallet hygiene. No technical fix has been released, leaving users wary over transaction security (Security tips for protecting digital assets).

Ethereum Faces Critical Security and Regulatory Challenges

Did you know? Ethereum’s EIP-7702 delegations mirror past DeFi exploits, illustrating how similar patterns of attack complexity and financial impact recur despite evolving security measures.

CoinMarketCap shows Ethereum (ETH) currently at $2,501.92 with a market cap of $302.04 billion and a 9.28% dominance. The trading volume has recently dropped 47.07% to $12.00 billion in a day. ETH’s price fell 0.69% in 24 hours but grew by 36.42% over the past month.

CoinCu research suggests immediate challenges for Ethereum include bolstering network defenses and transparency. Historical breach patterns prompt regulatory attention towards maintaining investor trust. As financial vulnerabilities grow, coordinated industry responses are critical to address persistent security threats effectively (Alert regarding online scams and fraud detection).