Attacker Drains $7.45 Million From an Avalanche Safe Using an Approval Granted Months Earlier to an Empty Address

On October 26 an attacker emptied a 2-of-7 Safe multisignature wallet on Avalanche C-Chain that held about $7.45 million of trading inventory. The loss happened in a single block. The security research archive DeFiHackLabs added a proof-of-concept reproduction on Thursday under the name "approval-squat," and the pull request documents the attack sequence.

The root cause was a stale token approval. On March 7, 2026, the Safe granted unlimited spending approvals for USDC, WAVAX, WETH.e and BTC.b to the address 0x3725bd4d175283108156c3f15f86e1c51266155d, according to a technical write-up by Panda Security. No contract existed at that address on Avalanche. The address is the 13th deployment output of a Safe "CreateCall" helper contract. Because the helper's deployment addresses can be computed in advance, anyone could reproduce them. A token approval is tied to the address itself, not to the party that intended to use it. Whoever deployed code there first could spend the allowance.

The attacker deployed the CreateCall helper on Avalanche through the standard singleton factory. The attacker then made 12 throwaway deployments to advance the helper's counter and deployed a sweeper contract as the 13th, which landed on the approved address. The sweeper called transferFrom on all four tokens and pulled the Safe's full balances. Crypto Times reported that a bot that copies profitable pending transactions (a maximal extractable value, or MEV, bot) front-ran the original attack transaction. The Safe's owners then offered a 42,500 WAVAX bounty for the return of the funds. No outlet has reported a recovery or attributed the attack. As the Panda Security analysis puts it, the Safe contracts "did exactly what they were built to do."

The same DeFiHackLabs update brought the archive's incident count to 904. A separate commit reproduced a March 2026 exploit of dTRINITY's dLEND market. In that exploit an attacker inflated the liquidity index of an empty lending market, a rounding attack against freshly launched pools. Earlier this month, an adapter exploit drained about $305,000 from two Safes linked to Aave through a module the Safes had authorized. Data from Lightning.news cited by Bitcoin Magazine puts net 2026 crypto hack losses at roughly $2.35 billion after freezes and returns.

On the defensive side, a draft Ethereum Request for Comments (ERC) posted to Ethereum Research proposes a standard for Secure Transaction Verification and Authorization. It would create a common interface for human-readable transaction simulation, "scoped authorization" and independent checks of signing payloads for ordinary wallets, smart accounts and multisigs. The draft comes from a pseudonymous author and has no client or wallet commitments. Simulation at signing time would not have caught the Avalanche loss, because the March approval did what its signers intended. The scoping element, bounded and expiring permissions, addresses the actual failure.