A cryptocurrency trader has lost tens of millions of dollars in a so-called “address poisoning” scam. Address poisoning scams are carried out by thieves who create spoof accounts of their victim’s online crypto address, which they use to send the victim a small amount of currency in the hopes that they will later accidentally send the funds to the fake address, according to cryptocurrency exchange Transak.
Since blockchains are public, it is easy for scammers to find people's cryptocurrency addresses and send fake phishing transactions to victims.
CertiK, a blockchain security firm, confirmed in a post on X that it had discovered a $69.3 million transfer of Bitcoin to an address “linked to address poisoning.”
The victim’s cryptocurrency wallet now shows a total loss of about 97% of its assets on Coinbase. The account is now worth over $1.6 million.
PeckShield, another security firm, wrote on X that the scammers exchanged the stolen bitcoin for 23,000 ether and then transferred the funds. Ethereum is trading at $3,116 per coin, the Daily Hodl reported.
Trezor, another cryptocurrency trading platform, recommends double-checking each address before sending a transaction and never copying an address from the transaction history when transferring funds to avoid address scams.
The company says sending a small test transaction before making a large transfer is also an effective way to verify the address.
Cryptocurrency-related fraud is on the rise, according to the FBI’s 2023 Internet Crime Report. The report says cryptocurrency-related fraud cost investors $3.94 billion last year, accounting for more than three-quarters of this year’s investment fraud losses.
One study found that cryptocurrency scams, or “piggy slaughter,” cost investors $75 million from 2020 to 2024. The scam begins with criminals sending a text message to a wrong number, which they use as a way to build trust with victims.
The scammers send small payments to the victim and lure them into making fake cryptocurrency investments, then cut off the connection once the victim sends a large sum of money to the thief.
The name of the scam refers to fattening the pig before slaughtering it.
Most cryptocurrency scams involve fraudsters trying to lure victims into unrelated scams by paying them in bitcoin so their crimes can't be traced, according to the Federal Trade Commission.
The agency says the best way to spot cryptocurrency scams is to never trust anyone who will only accept payment in cryptocurrency or who promises huge returns on a dubious investment.
“Investment scams are one of the top ways scammers trick you into buying cryptocurrency and sending it to scammers,” the FTC says. “But scammers also impersonate businesses, government agencies, and romantic interests, among other tactics.”$ETH
