Binance Unveils Solution to Spoofing Scam

Security experts at Binance have developed an algorithm to combat fraud through “address poisoning,” where users unwittingly send funds to scammers. This was reported by Cointelegraph.

The scam involves sending a small amount to a victim from an address resembling one already used in their wallet, so the transaction appears in their history. Hackers typically mimic the first and last few digits, which are displayed in most applications. The assumption is that the user will simply copy the data for their next transaction without verifying it fully.

Binance’s algorithm detects fake addresses by first identifying suspicious transfers, such as transactions with near-zero value or low-value tokens.

The tool then matches these with the addresses of potential victims and uses timestamps to locate the potential “poisoning” point.

Fake addresses are recorded in the database of HashDit, a company specializing in Web3 security. Crypto services like Trust Wallet use the firm’s API to alert users if they are about to transfer funds to a fake address.

According to Binance, the algorithm has already helped identify 13.4 million wallet infections on BNB Smart Chain and 1.68 million on Ethereum.

The exchange’s specialists began developing the tool after a victim of “address poisoning” lost approximately 1155 “wrapped” bitcoins worth around $68 million about two weeks ago. A few days later, the hacker returned nearly all the funds to the victim.

Earlier, Binance’s crime investigation team facilitated the arrest of a suspect involved in the ZKasino blockchain casino scam.