Bitcoin
Bitcoin Trader Loses $70 Million After Sending Crypto to Wrong Address
Down angle icon An icon in the shape of a downward pointing angle. A crypto trader lost nearly $70 million in an “address poisoning” scam. Business Insider
- A cryptocurrency trader lost nearly $70 million in an “address poisoning” scam.
- The scammers created fake accounts to trick the victim into sending funds to the fake address.
- Crypto-related scams are on the rise, costing investors nearly $4 billion last year, the FBI says.
A cryptocurrency trader reportedly lost tens of millions of dollars in a scam called “address poisoning.”
Address poisoning scams are run by thieves who create fake accounts from the victim’s online cryptographic “address”, which they use to send a small amount of money to the victim in the hopes that they will accidentally send money to the fake address later , according to Transaka crypto trading platform.
Because blockchains are public, it is easy for scammers to find people’s crypto addresses and send fake transactions to phish victims.
CertiK, a blockchain security firm, confirmed that it detected a transfer of $69.3 million in Bitcoin to an address “linked to address poisoning” on a post on X.
The victims crypto wallet now shows a total loss of about 97% of their Coinbase assets. The account is now worth just over $1.6 million.
Peckshield, another security company, wrote in X that the scammers traded the stolen Bitcoin for 23,000 Ethereum and then transferred the funds. Ethereum is trading at $3,116 per coin, according to The Daily Hodl.
TrezorAnother crypto trading platform, recommends double-checking each address before sending a transaction and never copying an address from transaction history when transferring funds to avoid address fraud.
Sending a small test transaction before making a large transfer is also an effective method of address verification, the company says.
Cryptocurrency-related scams are on the rise, according to 2023 FBI report internet crime report. Crypto-Related Scams cost investors $3.94 billion last yearsays the report, accounting for more than three-quarters of the year’s investment fraud losses.
A study Showed Crypto “Pig Slaughter” Scams Cost Investors $75 Million from 2020 to 2024. The fraud begins with criminals sending a text message with a wrong number that they use as a way to build trust with victims.
They then send them small payments and trick them into making fake crypto investments, only cutting off contact when the victim sends a large amount of money to the thief.
The name of the scam refers to the fattening of a pig before slaughter.
Most cryptocurrency scams involve scammers trying to get victims of unrelated scams to pay them in Bitcoin so their crimes can’t be tracked, according to the Federal Trade Commission.
The best way to spot a crypto scam is to never trust someone who will only accept payments in crypto or who promises big profit returns on a dubious investment, the agency says.
“Investment scams are one of the main ways scammers trick you into buying cryptocurrencies and sending them to the scammers,” says the FTC. “But scammers also pose as companies, government agencies and love interests, among other tactics.”