WLFI Token Holders Hit by EIP-7702 Wallet Exploit Attack

World Liberty Financial (WLFI) governance token holders are falling victim to a sophisticated phishing wallet exploit that leverages Ethereum's EIP-7702 upgrade, according to cybersecurity expert Yu Xian, founder of SlowMist.

Understanding the EIP-7702 Exploit

Ethereum's Pectra upgrade introduced EIP-7702 in May, enabling external accounts to temporarily function as smart contract wallets. This upgrade allows delegation of execution rights and batch transactions, designed to improve user experience. However, cybercriminals are exploiting this feature to target cryptocurrency holders.

Yu Xian reported on social media that hackers are exploiting the upgrade to pre-install hacker-controlled addresses in victim wallets. When users make deposits, attackers quickly "snatch" the tokens, specifically targeting WLFI token holders.

The security expert noted that multiple addresses belonging to the same victim had their WLFI tokens stolen using this "7702 delegate malicious contract" method, with the primary requirement being private key compromise.

WLFI Token Trading Launch

The Donald Trump-backed World Liberty Financial (WLFI) token began trading Monday morning with a total supply of 24.66 billion tokens, making it an attractive target for cybercriminals.

How the Attack Works

The exploit follows a specific pattern that security researchers have identified as the "Classic EIP-7702 phishing exploit." Here's how the attack unfolds:

Step 1: Private Key Compromise

Attackers typically obtain private keys through phishing campaigns, tricking users into revealing their sensitive wallet information.

Step 2: Contract Pre-Installation

Once criminals have access to private keys, they pre-install a delegate smart contract into the victim's wallet address connected to the compromised key.

Step 3: Automatic Token Theft

When victims attempt to transfer remaining tokens, including WLFI tokens stored in Lockbox contracts, the gas fees automatically trigger the malicious contract, transferring tokens to attacker-controlled wallets.

Real Victim Reports

Multiple users have reported similar incidents on WLFI governance forums. One victim managed to transfer only 20% of their WLFI tokens to a secure wallet, describing it as "a stressful race against the hacker." The user expressed concern that even sending ETH for gas fees could result in immediate theft.

Another community member reported that 80% of their WLFI tokens remain stuck in a compromised wallet, with fears that tokens will be immediately stolen once they unlock.

Community Concerns and Solutions

Forum users have highlighted that the token distribution method compounds the security risk. The wallet used for WLFI whitelist registration must also be used for presale participation, creating vulnerabilities for users with compromised wallets.

Security experts suggest several protective measures:

Immediate Actions

• Cancel or replace compromised EIP-7702 delegations with user-controlled contracts

• Transfer tokens away from compromised wallets immediately

• Use fresh wallets for new token claims

Prevention Strategies

• Verify all wallet transactions before signing

• Use hardware wallets for token storage

• Avoid clicking suspicious links or downloading unverified software

• Enable two-factor authentication where possible

Wider Scam Campaign

The WLFI token launch has attracted numerous scammers beyond the EIP-7702 exploit. Analytics firm Bubblemaps identified several "bundled clones" - smart contracts that imitate established cryptocurrency projects to deceive investors.

The official WLFI team has issued warnings about fraudulent communications, emphasizing they never contact users via direct messages on any platform. Official support channels operate exclusively through verified email addresses.

Protecting Your Crypto Assets

To protect against similar attacks, cryptocurrency users should:

• Regularly audit wallet permissions and delegate contracts

• Use separate wallets for different activities

• Keep private keys secure and never share them

• Verify all communications claiming to be from official project teams

• Monitor wallet activity for unauthorized transactions

Expert Recommendations

Security professionals recommend implementing direct transfer options for token claims to reduce exposure to automated sweeper bots. This would allow users to move tokens directly to secure wallets without exposing them to compromised addresses.

Users should also consider the timing of token transfers, as automated bots can execute theft transactions faster than manual user actions.

Conclusion

The EIP-7702 exploit targeting WLFI token holders demonstrates the evolving nature of cryptocurrency threats. While Ethereum upgrades aim to improve user experience, they can also create new attack vectors for cybercriminals.

Token holders must remain vigilant, implement proper security measures, and stay informed about emerging threats. As the cryptocurrency ecosystem continues to evolve, user education and security awareness remain critical for protecting digital assets.

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