Wed. Dec 11th, 2024

Address poisoning scams are becoming increasingly rampant in the cryptocurrency industry, posing a significant threat to users worldwide. In a recent case reported by Scam Sniffer, a Web3 anti-scam solutions provider, a Solana user lost $2.91 million after unknowingly sending funds to a fake wallet address strategically placed in their transaction history.

How the Scam Worked

The scam began when the fraudster sent the victim a minuscule amount of 0.000001 SOL using a fake wallet address, carefully designed to mimic the first four letters of a legitimate deposit address. This transaction was deliberately inserted into the victim’s transaction history. When the victim later attempted to send 7 million $PYTH coins to a legitimate wallet, they unknowingly copied and pasted the fake address from the contaminated history, sending $2.91 million worth of tokens to the scammer’s wallet.

According to Solscan, the intended wallet address was 4yfu48…gnhY, but the funds were instead sent to 4yfuQC…izcY. Arkham Intelligence has traced the stolen assets to another wallet address, 3eFh…ZNyt.

A Growing Trend in Address Poisoning Scams

This $2.91 million loss is not an isolated incident. Address poisoning scams have become a prominent tactic among crypto scammers in 2024. Notable examples include:

  • November 20, 2024: A user lost $129 million after copying a fake wallet address from their transaction history. Fortunately, the scammer returned the funds within an hour.
  • May 3, 2024: A crypto whale lost $68 million worth of WBTC after sending funds to a compromised address. The victim was unable to recover their losses.

Why Address Poisoning Is Effective

These scams rely on users’ habits of copying and pasting wallet addresses from transaction histories without verifying their accuracy. The fake addresses often closely resemble legitimate ones, making it difficult for users to spot the deception.

Safety Tips to Avoid Address Poisoning Scams

To protect yourself from such scams, consider the following precautions:

  1. Double-Check Wallet Addresses: Always confirm the wallet address manually before sending funds to ensure its accuracy.
  2. Send Test Transactions: When transferring large amounts of cryptocurrency, send a small test transaction first to verify the address.
  3. Avoid Copying from Transaction Histories: Refrain from using transaction histories as a source for wallet addresses, as they may be contaminated.

Final Thoughts

The rapid growth of the cryptocurrency industry has been accompanied by increasingly sophisticated scams like address poisoning. Users must remain vigilant and adopt best practices to safeguard their assets. As cases like the $2.91 million loss demonstrate, even a single mistake can lead to substantial financial losses.

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