What is Address Poisoning?
Address poisoning is a type of scam where attackers create a wallet address that closely resembles another user's legitimate address. They then perform minor transactions (often as small as 0.000001 Ethereum) to insert this address into the victim's transaction history. When the victim later copies this address for future transactions, they accidentally send their cryptocurrency to the scammer.
Imagine having a friend named Lucy who lives at 123 Maple Street. If someone else moved into 124 Maple Street and pretended to be Lucy, you might accidentally visit or send mail to the wrong address. Similarly, in address poisoning, scammers pretend to be a familiar address in your transaction history.
Real-Life Examples of Ethereum Scams
Recently, a crypto user lost 19.27 Ethereum, roughly $48,007, due to an address poisoning scam. The scammer generated eight transactions with the poisoned address, confusing the victim into sending their funds to the wrong address.
Such incidents aren't rare. In August 2024, a user lost a whopping 211 Ethereum valued at $553,312 in a similar scheme. In another tragic event in July 2023, a trader lost about $68 million worth of Wrapped Bitcoin.
How to Protect Yourself in the Cryptocurrency Market
To safeguard yourself from address poisoning, always double-check the wallet address before transferring funds. Use address book features offered by some wallets to store frequently used addresses. Avoid copying addresses directly from the transaction history.
Decentralized finance (DeFi) platforms and wallets often have security features like two-factor authentication (2FA) and address whitelisting. Enabling these can add an extra layer of security to your cryptocurrency transactions.
Keep your software and wallets updated and be aware of the latest scams by following reliable blockchain technology publications and forums.
Staying Safe in a Decentralized World
Cryptocurrency and blockchain offer exciting opportunities but come with risks. By understanding scams like address poisoning and implementing preventive measures, you can navigate the digital assets world more securely. Always remember, if something seems off, take a step back and verify before proceeding.
