Address Poisoning Scam: Tips To Avoid Losing Millions in Crypto

Disclaimer: This article is for informational purposes only and does not constitute financial advice. BitPinas has no commercial relationship with any mentioned entity unless otherwise stated.

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A trader reportedly lost around $70 million in an “address-poisoning” scam. The victim mistakenly sent Wrapped Bitcoin to a fraudulent address after an EOA (0xd9A1) imitated a 0.05 $ETH transfer.

Trader loses $70M

According to blockchain security firm CertiK, a cryptocurrency trader reportedly lost tens of millions of dollars in an “address-poisoning” scam. 

• The Amount: In its X post, the firm confirmed a $69.3 million Bitcoin transfer linked to this scam.
  • CertiK revealed that it detected a transfer of 1,155 Wrapped Bitcoin (WBTC) to an address linked with address poisoning. 
• The Scam: This occurred when an externally owned account (EOA) 0xd9A1 simulated a transfer of 0.05 ETH, resulting in the victim inadvertently sending the funds to an inaccurate address.
• The Tool: The Ethereum blockchain explorer, Etherscan, provides a record of the stolen funds, accompanied by a warning indicating the involvement of the address in a phishing scam.
• The Report: In addition, the victim’s cryptocurrency wallet on Coinbase reflects a significant loss, amounting to approximately 97% of its assets. The account’s current value is slightly over $1.6 million.

What is the Address Poisoning Scam?

Address poisoning is a new cryptocurrency attack that emerged in early 2023 with an aim to deceive targets into sending funds to attackers’ addresses through confusing transactions, as defined by CoinMarketCap.

• The Method: Attackers exploit various methods, such as creating fake contracts or using breadcrumbing techniques, to trick victims into sending cryptocurrency. 
• The Exploitation: Due to the public nature of blockchains, scammers can easily locate individuals’ crypto addresses and initiate fraudulent transactions to lure unsuspecting victims.
• The Reminder: These attacks are hard to detect and require users to double-check recipient addresses to stay safe. 

How to Avoid Address Poisoning Scam?

To prevent falling victim to address poisoning scams, consider the following measures:

• Stay Informed: Traders must educate themselves about how address poisoning scams operate to recognize potential threats.
• Ignore Suspicious Transactions: If traders suspect a transaction may be associated with an address-poisoning scam, refrain from engaging with it and avoid sending funds to the indicated address.
• Set Up Alerts: Utilize tools that allow users to set up alerts for transaction activity on their addresses or interactions with specific smart contracts.
  • This will help traders to monitor and verify legitimate transactions while flagging suspicious activity.
• Create a Contact List: Maintain a list of trusted wallets or contacts you regularly transact with, and ensure to verify addresses before sending funds.
• Use Trusted Sources: Obtain recipient addresses from reliable sources such as official websites, social media accounts, or verified communication channels.
  • Avoid using addresses obtained from untrusted sources or clicking on suspicious links.
• Utilize Name Services: Consider using name service addresses like Ethereum Name Service (ENS) or BSC Name Service (BNS) for an additional layer of protection.
  • This is because name service addresses are harder to duplicate and provide shorter, more secure addresses.
• Explore Technical Solutions: Some web3 wallets offer advanced features such as filtering transactions by contract address or whitelisting specific contracts.
  • Try these options to enhance security measures.
• Exercise Caution: Be wary of transactions labeled as suspicious or potential phishing attacks, but remember that not all scams may be immediately flagged.
  • Exercise caution and verify transaction details before proceeding.

This article is published on BitPinas: Address Poisoning Scam: Tips To Avoid Losing Millions in Crypto

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