Address Poisoning Scams Cost Ethereum Users $79.3 Million Over Two Years, Study Finds ⋆ ZyCrypto

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Address poisoning attacks are on the rise on Ethereum, leading to widespread losses. Blockchain security experts flagged the threat across the chain after stablecoin transactions underscored fresh user risks.

Ethereum & BSC At the Core of Scams

On-chain platform Etherscan revealed more cases of the infamous trend and possible factors for the sharp rise over time. Last month, crypto user Nima made two stablecoin transactions and got over 89 watch address notifications, sparking new investigations.

Scammers create addresses similar to those in the user’s transaction history to ultimately deceive the sender. While these scams have long existed, modern tools can now make massive automation possible.

A USENIX study confirmed address poisoning losses on Ethereum hit $79.3 million within two years before the Fusaka upgrade. Bad actors targeted a total of 1.3 million users in 17 million distinct poisoning attempts. Although Ethereum recorded more losses, leading to greater community concern, BNB had more cases.

Within the same period, BNB users lost $4.4 millions from a total of 252 million poisoning attempts. Figures are much higher for the chain (1,355%) due to lower transaction costs. These attacks account for a large share of crypto-hack volumes each quarter.

Attackers often monitor blockchain activity to identify potential targets. Once a transaction is detected, automated systems generate lookalike addresses that mimic the beginning and ending characters of legitimate addresses the user has interacted with…”

Unlike other hacking methods, data show that address poisoning is largely unsuccessful in terms of attempt ratio, but it becomes a major threat due to automation. Specifically, it has a success rate of 0.01%; however, experts warn that such a low rate can lead to heavy losses.

Attackers deploy these tactics against millions of users, hoping to get a few victims. Lower transaction costs are a significant factor behind millions of attempts to scam a few users.

The Fusaka upgrade lowered transaction costs on Ethereum, allowing more attackers to initiate poisoning attempts. On the flip side, crypto users are now more careful after recurring incidents. According to blockchain security experts, user education plays a major role in asset protection alongside platform protections. 

Platforms like MetaMask warned users about copy-and-paste methods, urging extra caution when entering addresses. Overall, the total number of crypto scams, including address poisoning cases, soared throughout last year, but losses dipped slightly, pointing to positive results.