Learn Concept: Address Poisoning in Cryptocurrency Transactions

By: Eva Baxter

Address Poisoning is a technique used by scammers to manipulate a victim's transaction history, leading them to send funds to a fraudulent address. This scam occurs when malicious actors send small-value transactions from addresses that closely mimic legitimate ones in a user's transaction history. As a result, unsuspecting users inadvertently select and use these tainted addresses for subsequent transfers, sending funds to the scammer's address. This method gains its effectiveness from its reliance on typical user behavior patterns, where users often copy-paste addresses from their past transactions without scrutinizing them closely.

The rise in such scams underscores the need for increased vigilance and caution when dealing with crypto transactions. Users are advised to double-check addresses before making transactions and consider the use of address-book features, when available, to store known and trusted recipient addresses. Blockchains and wallets may further mitigate this by implementing UX improvements designed to flag or highlight unusual activity in transaction histories.

Address poisoning forms part of a broader category of social engineering scams, which can also include phishing and other deceptive tactics aimed directly at users to gain access to assets and sensitive information. Staying informed and adopting best practices when it comes to digital asset security is essential to reducing the risk posed by these evolving threats.

For more on emerging security threats and protective measures in the crypto space, you might explore further insights here.