Wintermute Warns About Security Risks in Ethereum EIP-7702 Upgrade After Surge in Wallet Exploits
Ethereum’s upcoming Pectra upgrade, featuring EIP-7702 proposed by Vitalik Buterin, is under scrutiny as major market maker Wintermute highlights significant security concerns. EIP-7702 aims to allow externally-owned accounts (EOAs) to temporarily function as smart contract accounts, improving Ethereum wallet utility. However, since late May 2025, researchers and Wintermute have reported a rise in wallet-draining attacks linked to this proposal, including a $150,000 ETH phishing incident. Malicious actors are exploiting the delegation process, using automated contracts to sweep funds from vulnerable wallets. Wintermute urges the Ethereum developer community to adopt a cautious, incremental approach, thoroughly testing EIP-7702 before launch. Security experts recommend users verify all contract interactions and use only reputable DApps and wallet providers. This development could impact market confidence and on-chain activity, making vigilance critical for traders and developers as Ethereum’s security landscape evolves.
Bearish
The surge in wallet-draining attacks linked to EIP-7702 and expert warnings about new security vulnerabilities present clear risks for Ethereum users. The prominent concerns raised by Wintermute and security firms highlight that, if not properly addressed, these vulnerabilities could undermine trader confidence and increase short-term volatility. Historically, similar news around protocol-level security threats has led to price pressure on ETH, as traders anticipate potential losses or hesitancy among users. In the long term, careful review and mitigation could restore market confidence, but until comprehensive security measures are demonstrated, the immediate impact is likely bearish for Ethereum.