Wintermute Warns Pectra Upgrade Risks, Will ETH Ever Be Bullish Again?
2025-06-03
Ethereum’s latest upgrade, known as the Pectra hard fork, was expected to improve user experience and wallet functionality. But instead of enthusiasm, it has sparked concern—especially from Wintermute, a well-known crypto trading firm.
Their recent analysis raises an urgent warning: the upgrade may be creating new opportunities for attackers.
As vulnerabilities become more apparent, many in the Ethereum community are asking whether this upgrade will hold the network back, and what it means for ETH’s future performance.
What Is EIP-7702 and Why It Matters
At the heart of the controversy is EIP-7702, one of the most talked-about features of the Pectra upgrade. This proposal, championed by Ethereum co-founder Vitalik Buterin, was designed to make Ethereum wallets more flexible.
It allows wallets to temporarily behave like smart contracts. That means users can batch multiple actions, set spending limits, or even use social authentication to approve transactions—all in one step.
These changes were meant to simplify blockchain interaction, especially for new users. In theory, it is a step toward greater user adoption. In practice, however, the flexibility introduced by EIP-7702 may be giving hackers new tools to exploit.
Wintermute: Most EIP-7702 Contracts Are Malicious
Wintermute’s research paints a troubling picture. According to their analysis, over 80 percent of the delegations made under EIP-7702 are being used in suspicious ways.
These delegations are tied to contracts with identical code patterns, suggesting automated deployment for malicious purposes. The main contract under scrutiny has been given a nickname by Wintermute: CrimeEnjoyor.
Described as "short, simple, and widely reused," CrimeEnjoyor allows attackers to automatically sweep funds from compromised wallets.
If a user's private key is exposed, this contract can instantly move all assets to the attacker’s wallet in a single, batched transaction.
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The Wider Security Risks
The situation is not just theoretical. According to security firm Scam Sniffer, one user recently lost nearly $150,000 through a malicious batched transaction linked to the Inferno Drainer, a scam-as-a-service platform that has been plaguing crypto users for years.
SlowMist, another blockchain security firm, has also issued an advisory about EIP-7702. They recommend that wallet providers clearly display contract targets whenever users authorize delegations.
Without such transparency, users may not recognize they are approving potentially harmful actions.
Yu Xian, the founder of SlowMist, said on X, "As we predicted, the phishing gangs have caught up. Everyone should be vigilant."
Is This a New Problem, or an Old One in a New Form?
Some experts argue that EIP-7702 is not the core problem. Taylor Monahan, a long-time crypto security advocate, said the real issue remains unchanged: users struggle to protect their private keys.
"It's not actually a 7702 issue," Monahan explained. "It’s the same issue crypto has had since day one. EIP-7702 just unlocks a bunch of abilities that make sweeping addresses more cost efficient and less tedious."
In other words, while EIP-7702 might be enabling new attack vectors, the fundamental weakness lies in key management. As long as users fail to secure their keys, upgrades like Pectra will continue to carry risks.
What Does This Mean for Ethereum and ETH’s Price Outlook?
The security concerns tied to EIP-7702 could impact Ethereum’s image in the short term. Innovations are meant to increase trust and usability, but vulnerabilities—especially ones that lead to real financial loss—can damage sentiment.
ETH’s price, while recently rebounding, remains under pressure. Investor confidence often dips when user funds are at risk, especially from attacks that target wallet-level security.
Despite these risks, Ethereum continues to be a central pillar in the crypto ecosystem. Developers are already responding with better wallet interfaces and clearer delegation alerts. If Ethereum can address these concerns quickly, it may not hurt the long-term bullish outlook for ETH.
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Frequently Asked Questions (FAQ)
Q: What does a Pectra upgrade do?
A: The Pectra upgrade significantly increases Ethereum's transaction capacity by directly improving blob throughput and indirectly enhancing validator consolidation.
Q: What will the Pectra upgrade allow users to do with their wallets?
A: The Pectra upgrade will allow for a more flexible wallet experience, in addition to faster processing speeds and better staking architecture.
Q: What is Ethereum's recent major upgrade?
A: The Pectra Upgrade is Ethereum's recent major upgrade. It enhances scalability by increasing the network's transaction capacity, which is important for supporting more decentralized applications and users.
Q: What are the benefits of Pectra Ethereum?
A: The Pectra upgrade benefits Ethereum users by aiming for an improved and more user-friendly experience, as well as enhanced security for their assets and data on the network.
Disclaimer: The content of this article does not constitute financial or investment advice.
