Address-poisoning scams on the rise – Crypto investor loses 70 million

From time to time, it looks like a new scam pops up every month. Just a few weeks ago, John Oliver did a long and extensive overview of the now very popular ‘pig-butchering’ scams (where money is mainly paid out in crypto) in his ‘last week tonight’ program.

By now, the newest hype is the ‘address poisoning’ scam, a fairly new phenomenon for the crypto world.

Allow us to explain.

Small transactions

An ‘address poisoning attack’ happens as follows: the criminal copies your crypto address and changes some numbers or characters from that often very long address and opens a new address with that changed code. Then the criminal sends you small transactions (for example some Dogecoins) from this false address hoping that after a while you copy the address and send crypto back because you think his address is yours and you don’t pay close attention to checking all the characters.

In other words the criminals risk small amounts of money in the hope of receiving large amounts as a result. Earlier this week, one of these scams succeeded when a crypto investor transferred about $70 million worth of Wrapped Bitcoin to a crypto address that was not his own but looked very similar.

🚨ALERT🚨Are we mistaken, or has someone truly lost $68M worth of $WBTC? Our system has detected another address falling victim to address poisoning, losing 1155 $WBTC. 😢

Victim: https://t.co/5NKlOFnepJ

Address poisoner: https://t.co/R6fF0QipBH

Poison transaction:… pic.twitter.com/UpG34ZcZvY

— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) May 3, 2024

The hacker’s crypto address has since been marked as ‘fake’ and ‘beware of phishing’, but the investor in question only has $1 million left in his Coinbase account and we do not have the impression that he will get the lost money back anytime soon.

You have been warned again.