- Binance’s security team creates an algorithm to identify and flag millions of “poisoned” cryptocurrency addresses.
- The new technology helps prevent users from mistakenly sending funds to addresses manipulated by scammers.
- Binance partners with Web3 security firm HashDit to enhance industry-wide defenses against these scams.
Binance, the world’s largest cryptocurrency exchange, has developed a sophisticated algorithm capable of detecting millions of compromised addresses. This initiative is part of Binance’s ongoing efforts to bolster security for its users and the broader crypto community.
Address Poisoning: A Growing Threat
Address poisoning is a deceptive technique employed by scammers who send small amounts of digital assets to a wallet address that closely resembles a potential victim’s address. This transaction makes the fake address appear in the victim’s transaction history, increasing the likelihood that the victim will inadvertently use it for future transactions.
Binance’s Proactive Measures
Binance’s security team has successfully implemented an algorithm that identifies these spoofed addresses by monitoring for suspicious transfers, such as those involving minuscule amounts or unknown tokens. By pairing these transfers with potential victim addresses and analyzing the timing of these transactions, the algorithm can effectively pinpoint and flag malicious activity.
Over the past evaluation period, this method led to the identification and flagging of approximately 13.4 million spoofed addresses on the BNB Smart Chain and 1.68 million on Ethereum. These identified addresses have been added to a database maintained by HashDit, a Web3 security firm partnering with Binance.
Industry-Wide Security Enhancement
HashDit plays a crucial role in disseminating information about poisoned addresses to other cryptocurrency service providers. By integrating HashDit’s API, platforms such as Trust Wallet can alert their users about potential threats when they are about to execute a transaction to a flagged recipient. This collaborative approach significantly enhances security measures across the industry.
Recent Scams and the Algorithm’s Impact
The necessity for such an algorithm was underscored by a recent incident where a trader lost $68 million to an address poisoning scam. The funds were mistakenly sent to a spoofed address, highlighting the potential financial devastation caused by such scams. Although the funds were unexpectedly returned following investigative pressure and public exposure of the scammer’s details, the episode serves as a stark reminder of the vulnerabilities present in digital transactions.
