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The Safe Wallet Scam: A Closer Look at Address Poisoning

Lilit Chichyan
By Lilit Chichyan 3 Min Read
safe wallet scam news
safe wallet scam news update

YEREVAN (CoinChapter.com) — The Safe Wallet scam repercussions span beyond “address poisoning” attacks. In the past week, a crypto hacker behind the scam successfully stole over $2 million from Safe Wallet users, increasing the total number of victims to 21.

Contents
Safe Wallet Scam DetailsMechanism of the Address Poisoning AttackThe Aftermath and Mitigation Strategies

Safe Wallet Scam Details

Scam Sniffer, a Web3 scam detection platform, revealed on Dec. 3 that about ten Safe Wallets had suffered losses of $2.05 million due to these attacks since November. The platform analyzed data from Dune Analytics, which indicates that this attacker has stolen a minimum of $5 million from approximately 21 victims over the last four months.

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Scam Sniffer also disclosed that one victim, who had $10 million in cryptocurrency in their Safe Wallet, fortuitously lost only $400,000 in the scam.

safe wallet address poisoning
Scam Sniffer Tweet. Source: X

As mentioned, the Safe Wallet scam involved a method known as “address poisoning,” where attackers deceive users into sending funds to fraudulent addresses.

Mechanism of the Address Poisoning Attack

Address poisoning works by confusing the victim through manipulated transaction histories. The attacker generates a contaminated address resembling the victim’s own and sends small amounts of cryptocurrency to it.

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safe wallet
Sam Sniffer’s proof of address poisoning. Source: X

This method creates a deceptive entry in the victim’s transaction history. For example, Florence Finance, one of the victims, transferred $1.45 million to a contaminated address in their transaction history​​.

The Aftermath and Mitigation Strategies

Following the Safe Wallet scam and incidents of address poisoning, investigative efforts such as those by MistTrack revealed that the stolen assets were often transferred to different Bitcoin addresses through THORChain​​. In response, platforms like Etherscan now display the last eight digits of addresses and include security reminders to prevent users from copying incorrect addresses.

Wallets like Rabby provide first-time transfer reminders to new addresses. Despite these measures, it’s crucial for users to practice safer transaction habits, such as not relying on transaction history for address verification and always cross-validating recipient addresses​​.

The Safe Wallet scam, particularly through address poisoning, proves that cyber threats in the cryptocurrency space are alive and well. Users must stay vigilant and informed to protect their assets against such sophisticated scams.

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Lilit Chichyan

Lilit is a Yerevan-based Markets writer, skilled in 3 languages, and interested in writing about the tech world, trading, art, and science. She also has a background in psychology and marketing, which helps deliver the right message to the target audience.

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