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Bitcoin trader loses almost $70 million after sending crypto to wrong online account address

Kenneth Niemeyer   

Bitcoin trader loses almost $70 million after sending crypto to wrong online account address
  • A cryptocurrency trader lost nearly $70 million in an "address-poisoning" scam.
  • Scammers made spoof accounts to trick the victim into sending funds to the fake address.

A cryptocurrency trader reportedly lost tens of millions of dollars in a so-called "address-poisoning" scam.

Address-poisoning scams are carried out by thieves who make spoof accounts of their victim's online crypto address, which they use to send a small amount of currency to the victim in hopes they will accidentally send money to the fake address later, according to Transak, a crypto-trading platform.

Because blockchains are public, it's easy for scammers to find people's crypto addresses and send out spoof transactions to phish for victims.

CertiK, a blockchain security firm, confirmed in a post on X that it had detected a transfer of $69.3 million worth of bitcoin to an address "linked with address poisoning."

The victim's crypto wallet now shows a total loss of around 97% of its assets on Coinbase. The account is now worth just more than $1.6 million.

PeckShield, another security firm, wrote on X that the scammers traded the stolen bitcoin for 23,000 ethereum and then transferred the funds. Ethereum is trading at $3,116 a coin, The Daily Hodl said.

Trezor, another crypto-trading platform, recommends double-checking every address before sending a transaction and never copying an address from transaction history when transferring funds to avoid address scams.

Sending a small test transaction before making a large transfer is also an effective method of verifying the address, the company says.

Cryptocurrency-related scams are on the rise, according to the FBI's 2023 internet crime report. Crypto-related fraud cost investors $3.94 billion last year, the report says, making up more than three-quarters of the year's investment scam losses.

One study found that crypto "pig butchering" scams cost investors $75 million from 2020 to 2024. The fraud starts with criminals sending a wrong-number text that they use as a way to build trust with victims.

Scammers send small payments to a victim and lure them into making fake crypto investments, then cut off contact once the victim has sent a large amount of money to the thief.

The scam's name refers to fattening a pig up before the slaughter.

Most cryptocurrency fraud involves scammers trying to get victims in unrelated scams to pay them in bitcoin so that their crimes cannot be traced, according to the Federal Trade Commission.

The best way to spot a crypto scam is to never trust someone who will only accept payment in crypto or who's promising big profit returns on a fishy investment, the agency says.

"Investment scams are one of the top ways scammers trick you into buying cryptocurrency and sending it on to scammers," the FTC says. "But scammers are also impersonating businesses, government agencies, and a love interest, among other tactics."


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