Binance Creates Algorithm to Thwart Address Poisoning Scams, Over 15 Million Spoofed Addresses Detected
Summary:
Binance's security team has developed an algorithm to combat 'address poisoning' scams, carefully identifying suspicious transfers and alerting users before they send money to potentially fraudulent addresses. Over 13.4 million spoofed addresses on BNB Smart Chain and 1.68 million on Ethereum were flagged by this. The identified addresses are registered in HashDit's database, Binance's security partner. The move aims to safeguard a broader segment of the crypto industry from such scams. These protections span HashDit's user-facing products and web browser extensions.
Security professionals at Binance, the world's leading cryptocurrency exchange, have developed a way to counter "address poisoning" scams - a growing method where scammers dupe investors into sending funds to a fraudulent address. The team has created an algorithm which has successfully identified millions of compromised crypto addresses, with the goal of warning users before they unwittingly send funds to cyber thieves. A total of over 13.4 million phony addresses on BNB Smart Chain and 1.68 million on Ethereum were revealed with this method.
Address poisoning, otherwise known as address spoofing, is a deceptive technique which involves scammers sending minimal digital assets to a wallet closely resembling a prospective victim's address. The aim is to make it part of the wallet's transaction history in the hope that the victim will mistakenly copy and send funds to the scammer's address.
Binance's algorithm hunts for spoofed addresses by initially identifying suspicious transfers, such as those with near zero value or unknown tokens. These are then paired with possible victim addresses and any suspicious transactions are noted - this aids in locating the potential source of the poisoning.
These deceptive addresses are then recorded in the database belonging to Web3 security firm HashDit, who are security allies with Binance. This is a preventative measure which will shield a larger part of the crypto industry from falling victim to these scams.
Several cryptocurrency service providers use the API supplied by HashDit to strengthen their defenses against a range of scams. Trust Wallet is an example of this, which makes use of the database to warn users if they are close to transferring funds to a compromised recipient.
The algorithm will also aid in flagging any impersonated addresses on products owned by HashDit, as well as on web browser extensions and MetaMask snaps.
The necessity for an algorithm such as this became apparent a fortnight ago when a trader lost $68 million due to an address-poisoning scam. In a surprising event, the thief returned the stolen funds after cyber investigators tracked potential IP addresses based in Hong Kong. This indicates that the thief did not want to draw attention following the scam.
Binance explains that traders oftentimes only verify the beginning and end of the wallet's 42 alphanumeric characters as protocols tend to only display these characters. Hijackers can use vanity address generators to personalize their addresses to appear similar to a certain address, making it difficult to detect. A genuine Ethereum address like 0x19x30f…62657 can be impersonated using an address that looks similar like 0x19x30t…72657. This could be completely different in the middle while maintaining the beginning and end characters.
Published At
5/16/2024 1:19:44 PM
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