Holiday Phish: How a Fake ‘CircleMetals’ Release Nearly Turned Tokenized Gold Into a Wallet-Draining Trap

Christmas Eve deception: how the fake release spread and was exposed

Late on a holiday evening, a professional-looking press release landed in inboxes and social feeds claiming a new Circle-branded product called “CircleMetals” — tokenized gold and silver swaps tied to widely held stablecoins. The release used familiar corporate language, copied Circle’s styling, and pointed readers to a polished landing page and social posts. Within minutes, copycat posts appeared on messaging apps and a paid ad placement amplified the claim.

Circle denied the product within hours, saying the announcement was fraudulent. The takedown chain that followed — domain registrars, press-wire services and social platforms — confirmed the release was not routed through Circle’s official channels. The forged domains and PR wire entries had been created the same day, and WHOIS records showed recent registrations timed to hit the holiday window when corporate teams are slower to respond.

How the scam was engineered — and how wallets actually get emptied

This wasn’t a simple fake announcement. It was a coordinated multi-layer attack designed to trick users into connecting wallets and approving token operations that hand over control.

Step one: legitimacy theater. The attackers cloned a corporate-looking domain, mirrored logo and language, and seeded the fake release through a commercial press-distribution channel. That created an outward signal of authenticity that social algorithms amplified.

Step two: the frontend hook. The landing page contained a web3 interface that asked visitors to “connect wallet” and sign a benign-looking agreement. Under the hood, the site requested one of two dangerous signatures: an ERC-20 approve call granting an unlimited allowance to a named token contract, or an off-chain “permit” signature that lets the contract move tokens without further prompts. Both flows are common for genuine DeFi UX, which is why the trick works.

Step three: a phantom token and a malicious router. The fake token tickers used in the release — examples circulating in forensic reports included names like GLDC, SILC and CIRM — had either non-existent on-chain contracts or freshly minted contracts with no verified bytecode. Once a user signed approval, the attacker could call transferFrom via a malicious router contract or exploit an approved proxy (often an ERC-1167 minimal proxy) to sweep any approved balances. Because the contract and front end are in the attacker’s control, the UX can display fake balances and simulated liquidity to reassure victims while draining funds.

Step four: liquidity theater and exit. To avoid immediate suspicion, some scams briefly seed tiny liquidity positions or show false API-driven price data. That gives victims a short window to approve transactions before an immediate swap and withdrawal to attacker-controlled addresses.

Why this goes beyond a PR misfire — market trust and short-term capital flows at risk

A convincing fake tied to a trusted brand threatens more than individual wallets. Stablecoins like USDC are used as the rails for many tokenized-asset products; an attack that implicates a familiar name can cause institutional holders and swap desks to pause activity or move funds to neutral custody. That creates temporary liquidity stress in specific pools and trading pairs, which can widen spreads and damage instruments pricing off those markets.

Exchanges and custodians will react quickly to any suggestion that a major payments or stablecoin issuer was compromised, even if the company is merely being impersonated. That reflex can trigger withdrawals from related products and delay market-making for tokenized assets until governance and provenance checks are clear. For asset managers and compliance teams, even a short-lived trust hit increases operational friction and can translate into measurable capital movement across ETFs, tokenized commodity products, and private trading desks.

Hidden dominoes: second-order risks investors and compliance teams are missing

1) Insurance and indemnity gaps. Insurers who underwrite custody and smart-contract risk may treat user-initiated approvals as excluded activity. That raises the chance that claims from drained self-custodied wallets are denied, shifting the loss back to retail and smaller institutional holders.

2) PR-wire governance will come under scrutiny. Attackers exploited the same distribution layer that legitimate corporate announcements use. Expect vendors to harden identity checks and for regulators to ask whether press distributors should implement corporate authentication standards.

3) Counterparty re-pricing. Prime brokers and market-makers will demand additional attestations from tokenized-asset issuers and custodians before providing liquidity, increasing the cost of market-making and potentially reducing depth for new tokenized commodities.

4) Compliance playbook changes. Firms will tighten front-end controls, requiring cryptographic proof of contract addresses and signed attestations from issuers before onboarding new token products. That delays go-to-market timelines and raises legal costs for tokenized asset issuers.

5) Attack timing is strategic. Holiday windows and time-zone gaps are attractive to attackers because incident response teams are thinned. Expect adversaries to schedule social-media and PR distribution spikes during known support downtimes.

6) Copycat amplification. Once a credible fake appears, imitators can spin smaller scams using the same naming conventions. Rapid brand-monitoring and registrar takedowns will be necessary but not sufficient; many attacks can reuse the same on-chain tricks with minimal technical overhead.

Investor survival kit: immediate steps for wallets, compliance and custodians

– Disconnect any wallets that interacted with the CircleMetals landing page and revoke approvals (via block explorers or wallet permission managers).

– Use on-chain explorers to confirm whether referenced token contracts exist and whether their bytecode is verified. Treat unverified bytecode as malicious.

– Freeze suspicious inbound wires and trades tied to those tickers and escalate to legal/compliance teams if clients report losses.

– Preserve logs: capture screenshots, HTTP headers, domain WHOIS, and PR-wire IDs for evidence and insurer or law-enforcement claims.

– Notify custodial partners and exchanges; ask them to block the listed contracts and addresses at the routing layer if possible.

– Publicly deny any client-facing claims from illegitimate domains on official channels with a pinned post and domain list to minimize copycats.

Daily monitoring playbook for traders, compliance and reporters

– Watch for sudden domain registrations that mimic corporate domains and set alerts for WHOIS activity with sub-24-hour creation times.

– Flag new press-wire entries claiming corporate product launches and verify governance tokens and registrant credentials before treating them as authoritative.

– Monitor on-chain for large approve events to token contracts with no prior history, and set alerts on wallets that approve unlimited allowances.

– Maintain a short whitelist of verified contract addresses for tokenized asset products; require multi-party cryptographic attestation before onboarding.

– Track social account creation and paid ad buys that reference your brand; rapid takedown requests should be part of vendor SLAs.

Preparedness stops an opportunistic holiday scam from becoming a systemic confidence event. The technical weaponry is banal; the advantage lies with whoever spots the pattern first and moves decisively.

Sources

• coindesk.com