Crypto Trader Mistakenly Transfers $70 Million in Bitcoin to Incorrect Address

• A cryptocurrency enthusiast was defrauded of close to $70 million through an ‘address poisoning’ hoax.
• The scam perpetrators set up bogus accounts, deceiving the individual into forwarding assets to a fabricated address.
• The FBI indicates a surge in cryptocurrency con jobs, with a nearly $4 billion toll on investors during the last year alone.

An ‘address poisoning’ tactic led to a cryptocurrency investor losing a fortune reportedly worth millions.

Such scams involve counterfeit crypto ‘addresses’ that scammers create, mimicking the victim’s legitimate one. They then bait the victim with minuscule cryptocurrency transactions in hopes they mistakenly return a large sum to the phony address, explains Transak, a digital currency exchange platform.

Given that blockchains are transparent, this makes it simple for swindlers to slip fraudulent transactions into legitimate crypto address flows to hook unsuspecting victims.

A significant pilfering event was flagged by blockchain auditor CertiK, revealing a Bitcoin transaction valued at $69.3 million sent to a wallet linked to ‘address poisoning,’ as noted in a social media update.

The compromised cryptocurrency wallet reflects a 97% depletion of assets, now merely surpassing $1.6 million, previously managed through Coinbase.

Security entity Peckshield observed that the engaged fraudsters traded the ill-gotten Bitcoin for 23,000 Ethereum, later moving the proceeds. With Ethereum’s current value at $3,116 per unit, this information comes from The Daily Hodl.

Checkpoint recommendations from leading crypto platform Trezor include meticulously verifying every transaction address and steering clear of utilizing address histories for fund transfers as a precaution against these scams.

Employing nominal test transactions in advance of sending larger amounts is an additional strategy promoted by the company to ensure address authenticity.

The FBI’s 2023 report on internet crime highlights a troubling rise in cryptocurrency scams, with such schemes swindling investors of $3.94 billion in the past year, constituting the majority of investment scam losses.

One analysis pinpoints ‘pig butchering’ cons as responsible for $75 million in losses over four years, beginning with misleading messages and culminating in phony crypto investments, severing ties only after substantial thefts.

These scams frequently coax victims unrelated to cryptocurrency into Bitcoin payments, enhancing the traceability challenge, per the Federal Trade Commission’s insights.

Spotting such crypto cons involves skepticism towards any party insisting on crypto payments or touting dubious investment returns, the agency advises.

“One prominent scam avenue involves investment schemes leading to the purchase of cryptocurrency and its subsequent transfer to con artists,” the FTC declares. It also warns of impersonation tactics, implementing shams of businesses, governmental entities, or even romantic interests.