In recent times, cryptocurrency scams have become a prevalent threat, costing investors significant amounts of money. Among these scams, “address poisoning” stands out, where malicious actors manipulate victims into sending funds to fake addresses.
These scams have reportedly resulted in substantial losses, with one Bitcoin trader purportedly losing tens of millions of dollars.
Address poisoning scams are carried out by thieves who make spoof accounts of their victim’s online crypto “address,” which they use to send a small amount of currency to the victim in hopes that they will accidentally send money to the fake address later, according to Transak, a crypto trading platform.
The public nature of Bitcoin names on blockchains facilitates these scams, making it easier for scammers to identify victims and execute fake transactions.
CertiK posted on Twitter on 3 May 2024, “a blockchain security company, a staggering $69.3 million worth of Bitcoin was recently moved to an address linked with address poisoning.
#CertiKInsight 🚨
Our system has detected a transfer of 1,155 WBTC (~$69.3m) to an address linked to address poisoning
EOA 0xd9A1 mimicked a transfer of 0.05 ETH which led the victim to send the funds to the wrong address
Stolen funds are here https://t.co/m2xpJW0QIZ pic.twitter.com/PWFhEsEN2G
— CertiK Alert (@CertiKAlert) May 3, 2024
The victim’s crypto wallet now shows a total loss of around 97% of its assets on Coinbase. The account is now worth just more than $1.6 million.
Peckshield, another security firm, wrote on X at 10:57 PM · May 3, 2024 that the scammers traded the stolen Bitcoin for 23,000 Ethereum and then transferred the funds. Ethereum is trading at $3,116 a coin, according to The Daily Hodl.
#PeckShieldAlert #Phishing A whale 0x1E22…8FD5 lost ~1,155 $WBTC (worth ~$71 million) after falling victim to address poisoning.
The phisher has swapped the stolen $WBTC for ~23K $ETH & transferred them out pic.twitter.com/dr7eTYQkAX— PeckShieldAlert (@PeckShieldAlert) May 3, 2024
To mitigate the risk of falling victim to such scams, industry experts advise adopting precautionary measures. Platforms like Trezor recommend double-checking each address before executing transactions and avoiding copying addresses from transaction histories to thwart potential scams. Additionally, conducting small test transactions before larger transfers can help verify the accuracy of the recipient’s address.
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Cryptocurrency-related scams are on the rise, according to the FBI’s 2023 internet crime report. Crypto-related frauds cost investors $3.94 billion last year, the report says, making up more than three-quarters of the year’s investment scam losses.
One study showed that crypto “pig butchering” scams cost investors $75 million from 2020 to 2024. The fraud starts with criminals sending a wrong-number text that they use as a way to build trust with victims.
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