How do scammers use fake transaction simulation sites to steal crypto?

What is fake transaction simulation?

Fake transaction simulation is yet another wallet-draining threat to unsuspecting crypto users. Also known as transaction simulation spoofing, scammers create the illusion of a successful cryptocurrency transaction without carrying out actual blockchain transfers. 

Scammers use fake transaction simulators to deceive victims by presenting fake transactions that never reach the blockchain. To make a fraudulent act appear real, simulators modify wallet interfaces and generate deceptive notifications and fabricated transaction histories. Simulators can be in the shape of websites, malicious browser extensions, bots, mobile apps or smart contracts.

Victims of fake transaction simulators believe they have received funds, while there is no actual transfer of funds. As reported by ScamSniffer on Jan. 10, 2025, a transaction spoofing simulation was spotted with the scammer(s) successfully stealing 143.45 Ether (ETH), worth about $460,000.

As scammers exploit fake websites and platforms to simulate cryptocurrency transactions, phishing attacks have become increasingly prevalent. Wallet drainer phishing attacks surged in 2024, with losses skyrocketing to $494 million, according to the Crypto Phishing Report 2024 — a 67% increase from the previous year. The number of victims also grew, with 332,000 affected addresses, marking a 3.7% rise from 2023. These alarming figures underscore the growing sophistication of crypto phishing tactics.

Did you know? Binance suffered significant losses due to phishing scams in the third quarter of 2024, reaching $127 million. To combat this, Binance bolstered its security measures with several initiatives, including custom pop-up alerts to warn users of suspicious activity, a database of known malicious addresses and user education programs.

How does fake transaction simulation work?

Transaction simulation in cryptocurrency wallets enables users to view the outcome of a transaction before executing it. The feature is designed to help users understand how assets will move on the blockchain. They can get insight into the platform’s ease of use, potential flaws and associated fees. These simulations are now being used by bad actors to produce fake transactions. 

Scammers have discovered ways to exploit transaction simulation in crypto wallets, taking advantage of the delay between simulation and execution. Malicious smart contracts and specifically designed phishing websites can defraud users using this loophole.

A phishing site might deceive users into signing seemingly harmless transactions. For example, a user may be prompted to “claim” a small ETH transfer, with the wallet simulation displaying a minimal amount, such as 0.000…0001 ETH. However, in the background, attackers would manipulate the contract state. When the user signs the transaction, often within seconds, the contract executes an entirely different function, draining the wallet completely.

Taking the case (theft of 143.45 ETH) mentioned above as an example, the scammer(s) leveraged the delay window to execute the scam. The phishing site modified the contract state before execution. When the victim, unaware of what had happened in the background, signed the transaction, the “claim” function executed the scammer’s plan. The wallet, appearing secure during simulation, was entirely drained upon execution.

Tech tactics used in fake transaction simulation

Scammers fake transfers using fabricated transaction records, manipulated blockchain explorers and specialized tools like Telegram bots and fake transaction generators. They create false transaction IDs, timestamps and wallet addresses or inject fake data into compromised explorers to mimic real transfers.

Fraudsters might also manipulate wallet displays to show non-existent transactions, deceiving users into believing they have received funds. Malicious software, such as fake apps and browser extensions, can alter what users see in their wallets. Scammers may intercept and modify real-time transaction data, creating fake confirmations that appear genuine. Another tactic they use is exploiting wallet software vulnerabilities to display false balances and transfers.

Malicious smart contracts that generate fake transaction events publish “successful transfer” logs on blockchain explorers, tricking users into believing they have received funds when no actual transfer has occurred.

Did you know? Cybercriminals deploy an estimated 3.4 billion phishing emails daily, disguised as legitimate correspondence from trusted sources. This translates to a staggering trillion-plus phishing attempts annually.

Use of social engineering in fake transaction simulation

Scammers use social engineering tactics to push victims into acting hastily and walking into traps laid for them. They create urgency through fake limited-time offers, false network congestion warnings and countdown timers, pushing users to confirm transactions without proper verification. Combining technical fraud with psychological manipulation, they set up powerful tools for deception.

To mislead users, fraudsters may mimic real exchanges and wallets designed to rush users into falling for fraudulent deals. For instance, a scam platform might display a warning like, “Fees discount just for three days — Hurry with your transaction!” prompting many users to dash to complete their desired transactions.

Scammers exploit trust and emotions to give their nefarious sites even more convincing looks. They trigger the fear of missing out (FOMO) through fake investment opportunities, exclusive deals and promises of substantial profits. A common tactic includes hacking celebrity profiles on social media, particularly X handles, to put up fake posts to draw users to their site. For example, they may post on X, claiming a user has received a large airdrop, only to redirect them to a site that steals their crypto.

How can web wallets deal with fake transaction simulation?

To combat fake transaction simulations, web wallets must implement several security measures to enhance user protection. These include real-time simulation refresh mechanisms, security service integration and UI/UX improvements. Using these strategies, web wallets can significantly reduce the risks associated with fake transaction simulations, offering users a safer and more transparent experience:

• Real-time simulation refresh mechanism: Web wallets need to set up a mechanism that dynamically adjusts refresh rates based on blockchain block times. They should display timestamps and block heights to improve user awareness and include expiration warnings for outdated simulations.
• Security service integration: Web wallets should incorporate phishing contract blocklists from major security service providers. Conducting real-time security checks on contract addresses is a crucial component of any strategy to deal with such attacks. 
• UI/UX improvements: A clear indication of the time-sensitivity of simulation results can help reduce fraudulent incidents. Web wallets need to introduce extra confirmation steps for high-risk transactions. Providing a quick view of transaction risk analysis and simplifying security alerts can help users better understand potential threats.

Did you know? A Chainalysis report indicates a projected 21% increase in stolen funds in 2025, compared to 2024, with losses primarily concentrated within decentralized finance (DeFi) platforms. This trend may result in $2.2 billion worth of cryptocurrency stolen in 2025.

Red flags of fake transaction simulators

Fake transaction simulators trick users into believing they have received crypto funds, only to disappear when they try to use them. Red flags include unrealistic deposit confirmations, lack of blockchain verification and pressure to make further payments. You need to be wary of warning signs when evaluating crypto platforms:

• Lack of transparency: Legitimate platforms are transparent. You must be suspicious of those that obscure team members, company history or operational details.
• Too good to be true: Overly professional interfaces and promises of unrealistic returns and zero-risk investments are often the signs of fraudulent platforms.
• Bad reputation: If there are negative user reviews and complaints about scams on a platform consistently, you need to consider them. 
• Unclear policies: Reliable platforms mention terms of service and privacy policies comprehensively. Vague or missing policies are a red flag.
• Market manipulation: Unexplained spikes in trading volume or extreme price fluctuations without any corresponding news or events can indicate manipulation.

How to prevent fake transaction simulators

Fake transaction simulators pose a significant threat. These deceptive tools can mimic legitimate transactions, leading to fraud, data breaches and reputational damage. Understanding how these simulators operate and implementing effective preventative measures is crucial for protecting your business and customers. Here is how you can mitigate the risks associated with fake transaction simulators:

• Verify everything: Double-check all transaction details — recipient addresses, amounts and gas fees — before confirming because the blockchain transactions are irreversible.
• Choose wisely: Use only reputable wallets and exchanges that have undergone third-party security audits and offer security measures like two-factor authentication (2FA) and cold storage.
• Beware of “free” offers: Be cautious of unsolicited “free token” offers, especially those requiring wallet connections.
• Smart contract safety: When interacting with smart contracts, use blockchain explorers or trusted platforms to verify their legitimacy and security audits.
• Independent verification: Use blockchain explorers like Etherscan or BscScan to independently verify transaction details, rather than relying solely on wallet or exchange interfaces, which can be manipulated.
• Stick to trusted DApps: Only use decentralized applications (DApps) with transparent teams, open-source code and positive security reviews.
• Update your software: Regularly update your software and devices to patch security vulnerabilities. Use strong passwords and avoid downloading software from untrusted sources.
• Stay informed: Educate yourself about common crypto scams. Follow security updates, engage with reputable communities and learn from past fraud cases.

What do you do if you become a victim of fake transaction simulation?

If you have fallen victim to a fraudulent transaction simulator scam, act fast to avoid further losses. Alert the platform where the scam occurred. Inform your network — friends, crypto communities and online forums — to prevent further dupe cases.

Document all evidence, including screenshots, transaction data and scammer texts. Report the scam to the appropriate authorities, such as cybercrime departments, financial regulators or blockchain platforms. If you share wallet access or private keys with the scammer, immediately transfer your remaining funds to a safe wallet to avoid further losses.

If you have lost considerable funds, call a blockchain forensic expert to trace transactions, though recovery may be difficult.