A cryptocurrency trader fell victim to an address poisoning scam, resulting in a loss of tens of millions of dollars. Address poisoning scams involve thieves creating spoof accounts of victims' online crypto addresses to deceive them into sending money to the fake address. The scam was confirmed by CertiK, a blockchain security firm, which detected a transfer of $69.3 million worth of Bitcoin to an address associated with address poisoning.
As blockchains are public, scammers can easily find crypto addresses and send spoof transactions to phish for victims. The victim's crypto wallet on Coinbase now reflects a total loss of approximately 97% of its assets, leaving the account with just over $1.6 million. Peckshield, another security firm, reported that the scammers exchanged the stolen Bitcoin for 23,000 Ethereum, which was then transferred. Ethereum is currently trading at $3,116 per coin.
To prevent falling victim to such scams, Trezor, a crypto trading platform, advises users to double-check every address before sending a transaction and avoid copying addresses from transaction history. They also recommend sending a small test transaction before making a large transfer to verify the address's authenticity.
Cryptocurrency-related scams are on the rise, with the FBI's 2023 internet crime report revealing that such frauds cost investors $3.94 billion last year, constituting over three-quarters of investment scam losses. One particular scam, known as 'pig butchering,' has cost investors $75 million from 2020 to 2024. This scam involves criminals building trust with victims through small payments before luring them into fake crypto investments and disappearing once a significant amount of money is sent.
The Federal Trade Commission warns against trusting individuals who only accept payment in crypto or promise substantial profit returns on dubious investments. Investment scams remain a prevalent tactic used by scammers to trick individuals into buying cryptocurrency and transferring it to them. The FTC advises vigilance against scammers impersonating businesses, government agencies, or using other deceptive tactics to defraud victims.
