May 22, 2024
Latest Cryptocurrency News

Binance Creates ‘Antidote’ to Combat Address Poisoning Scams

Binance’s security experts have created a groundbreaking algorithm designed to combat the rising threat of address poisoning scams in the cryptocurrency sector.

Address poisoning, or address spoofing, involves scammers sending small amounts of digital assets to wallets with addresses resembling those of potential victims, embedding the fraudulent address in the victim’s transaction history. This scam relies on the victim inadvertently copying and sending funds to the spoofed address.

In a report shared with Cointelegraph, Binance detailed the success of their new algorithm. The algorithm has already flagged over 13.4 million spoofed addresses on the BNB Smart Chain and 1.68 million on Ethereum.

The algorithm identifies suspicious transfers, such as those with minimal value or unknown tokens, pairs them with potential victim addresses, and timestamps these transactions to pinpoint instances of poisoning.

Partnership with HashDit Strengthens Industry Defense

Binance’s partnership with Web3 security firm HashDit enhances the algorithm’s efficacy. The spoofed addresses detected by Binance are added to HashDit’s database. This is then used by various cryptocurrency service providers to bolster their anti-scam measures. For instance, Trust Wallet leverages this database to warn users about potential spoofed recipients.

Additionally, HashDit’s user-facing products, web browser extensions, and MetaMask Snaps are also set to benefit from this algorithm. Thus, providing widespread protection against these scams.

Real-World Impact: Recovery of $68 Million Stolen in Address Poisoning Scam

The necessity for such preventive measures was underscored when an unknown trader lost $68 million worth of Wrapped Bitcoin (wBTC) to an address-poisoning scam on May 3.

Remarkably, the funds were returned ten days later after public scrutiny revealed the scammer’s potential IP addresses in Hong Kong. This suggests that the thief was deterred by the heightened attention.

Address poisoning scams exploit traders’ tendency to only verify the first and last digits of the 42-character wallet addresses, which most protocols display. Scammers use vanity address generators to create similar-looking addresses, further complicating the detection of these fraudulent activities.

Binance’s proactive approach in developing and implementing this algorithm marks a significant step forward in combating address poisoning scams. Thus, protecting the cryptocurrency community.

Image by rawpixel.com on Freepik

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