Key Points:
Binance's new algorithm combats address poisoning scams.
The algorithm flagged millions of spoofed addresses on BNB and Ethereum.
Address poisoning scams are effective due to partial wallet code verification by traders.
Binance scam alert is able to combat address poisoning scams, identifying over 15 million spoofed addresses across BNB Smart Chain and Ethereum.
According to Cointelegraph, Binance has developed an algorithm to combat the surge in address poisoning scams. These scams involve tricking investors into sending funds to fraudulent addresses that closely resemble their own.
The deceptive practice, known as address spoofing, involves scammers sending a small amount of digital assets to a potential victim's address, hoping the victim will accidentally copy and send funds to the scammer's address.
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How Binance scam alert Detects and Flags Spoofed Addresses
Binance's algorithm identifies and flags poisoned addresses, alerting users before they transfer funds to these fraudulent addresses. The algorithm was instrumental in identifying over 13.4 million spoofed addresses on BNB Smart Chain and 1.68 million on Ethereum.
The algorithm detects spoofed addresses by identifying suspicious transfers, such as those with near zero value or unknown tokens, pairing them with potential victim addresses, and timestamping malicious transactions to find the potential point of poisoning.
These spoofed addresses are registered in the database of HashDit, a Web3 security firm and Binance's security partner. Such a database helps protect the wider crypto industry from poisoning scams and is used by many cryptocurrency service providers to boost their defenses against a variety of scams.
Importance of Preventive Measures: A $68 Million Loss Incident
The need for this preventive algorithm became clear following a recent incident where a trader lost $68 million to an address-poisoning scam.
Address poisoning scams may seem easily avoidable, but most traders only verify the first and last digits of the wallet’s 42 alphanumeric characters, making it easier for scammers to deceive them.
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