Crypto scams are on the rise, and scammers are getting more creative. One type of scam that recently made news is “address poisoning.” Just today, experts reported more than $860,000 in losses by two victims from this scam.
On Wednesday, February 26, the Scam Sniffer X account reported two instances of address poisoning, also known as transaction poisoning. The first victim lost $763,662 in crypto, while another victim lost $104,685 by copying addresses from their wallet history.
The practice involves sending small transactions to a victim’s address, which is similar to their own. The scammer’s address then appears in the victim’s transaction history. From there, scammers hope that a victim will accidentally copy the scammer’s address instead of their own and send crypto to it.
Once they do, the transaction cannot be reversed, leading to serious losses. For major wallets, these losses can amount to hundreds of thousands or even millions. For instance, in May 2024, one crypto whale lost $68 million in wrapped Bitcoin before the scammer returned the funds.
Address poisoning is common in performance blockchains such as Binance Smart Chain and Polygon. The low transaction fees on these chains make it possible to deploy the scam on a large scale.
How to Stay Safe from Address Poisoning
Unlike other types of attacks, address poisoning relies on user’s carelessness and speed when performing their transactions. The only way to protect yourself from these attacks is to be careful when sending crypto.
Experts recommend several steps to avoid the potential for error. For one, always double-check the address before sending out crypto. In any case, never copy addresses from transaction histories, as that is the vector of this attack. Instead, it is better to keep one’s address in another app, which is normally inaccessible to scammers.
With this feature, users can also use bookmarked addresses on wallets, as scammers cannot temper this. Wallets that support whitelists also create another layer of security.
In that case, users are warned when they are about to send crypto to a new address. If these warnings pop up, always double-check the address you are sending to.
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