Think you’re having a rough day? Try walking in this crypto trader’s shoes. A recent victim of a diabolical “address poisoning” scam, they’re now staring down the barrel of a jaw-dropping $70 million loss in Bitcoin (BTC-USD). The scheme? Crafty scammers set up fake accounts, tricking the unsuspecting trader into sending funds to a bogus address.
Revealing the Scam’s Inner Workings
Address poisoning scams, a blight on the crypto landscape, exploit the transparent nature of blockchain technology. Thieves meticulously clone victims’ crypto addresses, waiting for even a small transfer to lure them into sending larger sums to the fake address in future transactions.
CertiK, a leading blockchain security firm, raised the alarm after spotting a whopping $69.3 million Bitcoin transfer to an address linked to this nefarious ploy. What was once a thriving crypto wallet now mirrors a tale of devastation, with approximately 97% of assets on Coinbase (NASDAQ: COIN) wiped out, leaving a paltry fraction valued at just over $1.6 million.
Adding insult to injury, Peckshield, another security outfit, revealed that the scammers swiftly converted the stolen Bitcoin into 23,000 Ethereum (ETH-USD) before making additional transfers.
Investor Takeaway
As crypto scams run rampant, industry experts stress the importance of staying vigilant. Trezor, a leading hardware wallet company, emphasizes the need to double-check every address. Before sending funds, Trezor advises against blindly copying addresses from transaction histories to avoid falling victim to such scams. They also suggest conducting small test transactions as a precautionary measure before committing to larger transfers.
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