Blockchain
A Bitcoin trader loses $70 million after sending cryptocurrencies to the wrong address
- A cryptocurrency trader lost nearly $70 million in an “address poisoning” scam.
- Scammers created spoofed accounts to trick the victim into sending funds to the fake address.
- Cryptocurrency scams are on the rise, costing investors nearly $4 billion last year, the FBI says.
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A cryptocurrency trader has reportedly lost tens of millions of dollars in a so-called “address poisoning” scam.
Address poisoning scams are carried out by thieves who create spoofed accounts of their victim’s online crypto “address,” which they use to send a small amount of currency to the victim in the hope that he or she will later accidentally send money to the fake address, according to Transaka cryptocurrency trading platform.
Since blockchains are public, it is easy for scammers to find people’s crypto addresses and send spoof phishing transactions on behalf of victims.
CertiK, a blockchain security firm, confirmed that it detected a transfer of $69.3 million worth of Bitcoin to an address “linked to address poisoning” in a posted on X.
The victims the crypto wallet is now shown a total loss of approximately 97% of his assets on Coinbase. The account is now worth just over $1.6 million.
Peckshield, another security company, wrote on X that the scammers exchanged the stolen Bitcoin for 23,000 Ethereum and then transferred the funds. According to Ethereum, the coin is trading at $3,116 The Hodl newspaper.
Trezoranother cryptocurrency trading platform, recommends double-checking each address before sending a transaction and never copying an address from your transaction history when transferring funds to avoid address scams.
Sending a small test transaction before making a large transfer is also an effective way to verify the address, the company says.
According to the FBI’s 2023 report, cryptocurrency-related scams are on the rise Internet crime report. Fraud related to cryptocurrencies it cost investors $3.94 billion last yearthe report says, which account for more than three-quarters of annual losses from investment scams.
A study showed that “pig slaughter” scams cost investors $75 million from 2020 to 2024. Fraud begins with criminals sending a text message to the wrong number which they use as a way to build trust with victims.
Then, they send them small payments and trick them into making fake cryptocurrency investments, only cutting off contact once the victim has sent a large amount of money to the thief.
The name of the scam refers to fattening a pig before slaughter.
According to the Federal Trade Commission, most cryptocurrency scams involve scammers trying to convince victims of unrelated scams to pay them in Bitcoin so their crimes can’t be traced.
The best way to spot a cryptocurrency scam is to never trust someone who only accepts cryptocurrency payments or who promises big profits on a suspicious investment, the agency says.
“Investment scams are one of the primary ways scammers trick you into buying cryptocurrency and sending it to scammers,” the FTC says. “But scammers also impersonate companies, government agencies and interested individuals, among other tactics.”