Binance security experts have developed an ‘antidote’ against growing cases of scams
Binance security experts have developed an “antidote” to the growing cases of address poisoning scams, which trick investors into voluntarily sending funds to a fraudulent address.
The security team of the world’s largest cryptocurrency exchange developed an algorithm that detected millions of poisoned cryptocurrency addresses, according to a report shared with Cointelegraph:
“We developed a unique method of identifying poisoned addresses, which helps us alert users before sending funds to criminals and has been instrumental in identifying and reporting more than 13.4 million fake addresses on BNB Smart Chain and 1.68 million on Ethereum.”
Address poisoning, or address spoofing, is a phishing scam in which fraudsters send a small amount of digital assets to a wallet that closely resembles a potential victim’s address, to embed them to the wallet’s transaction history – in the hope that the victim will do it by mistake. copy and send the funds to their address.
Binance’s algorithm detects spoofed addresses by first identifying suspicious transfers, such as those with a value close to zero or unknown tokens, matching them to the addresses of potential victims and timestamping malicious transactions to find the potential point of poisoning.
The spoofed addresses were recorded in the database of Web3 security firm HashDit, Binance’s security partner, which will help protect the entire cryptocurrency industry from toxic scams, according to a Binance report.
“Many cryptocurrency providers use the HashDit API to strengthen their defenses against various scams. One of them, for example, is Trust Wallet, which uses a database of poison addresses to alert users when they are about to transfer money to a fraudulent recipient.
The algorithm will also help flag fraudulent addresses on HashDit user-facing products, web browser extensions, and MetaMask Snaps.
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Newspaper poisoning a growing concern after $68 million scam
The need for a protective algorithm became clear two weeks ago, after an unknown trader lost $68 million in an address poisoning scam. They mistakenly sent $68 million worth of Wrapped Bitcoin (wBTC) in a single transaction to a spoofed address on May 3.
In a fortunate but mysterious turn of events, the thief returned the $68 million on May 13, after several on-chain investigators began highlighting his possible Hong Kong IP addresses. This suggests that the scammer was not a white hat hacker, but rather a thief who was afraid of public attention after the scam.
It may seem easy to avoid address poisoning scams, but most traders only check the first and last digit of the wallet’s 42 alphanumeric characters, with most protocols only displaying the first and last digit.
To make things more difficult, scammers rely on fake address generators to customize their addresses so that they appear less random or more similar to a specific address, according to Binance.
“A native Ethereum address such as 0x19x30f…62657 could be spoofed using a similar address 0x19x30t…72657, which could be completely different in the middle while retaining the first and last characters.”
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