Coinspeaker
Binance Introduces Game-Changing Algorithm to Combat Spoofing Scams
The security team of the Binance exchange has come up with an algorithm that detects poisoning scams. The decision was necessitated by the number of address poisoning scam cases, which the exchange claims have been growing at an alarming rate.
To arrest the situation, security experts from Binance have now developed an “antidote” that not only identifies poisoned addresses but also alerts users before they send money to bad actors. Address poisoning scams or address spoofing scams as they are sometimes called trick investors into willingly sending funds to a fraudulent address.
Scammers deceive potential victims by sending a small amount of digital assets to a wallet address that closely resembles that of the unsuspecting victim. This is to make it part of the wallet’s transaction history and is usually done in hopes that the victim will accidentally copy and send funds to their own address.
Binance’s Antidote to the Rescue
According to a recent report, Binance’s security team has already detected over 15 million poisoned crypto addresses, thanks to its new algorithm. A statement about the unique method of identifying poisoned addresses reads in part:
“…Instrumental in identifying and flagging more than 13.4 million spoofed addresses on BNB Smart Chain and 1.68 million on Ethereum.”
How the algorithm works is that it first finds poisoned addresses by filtering out suspicious transfers. These include transfers that have near-zero values or worthless tokens. It then pairs them up with potential victim addresses before putting a timestamp on the questionable transactions to suggest what might be the actual point of poisoning.
After gathering all this information, Binance’s Antidote then registers the spoofed addresses in the database of Web3 security firm HashDit, the company’s security partner.
Address Spoofing Scam: A Growing Menace
As earlier noted, Binance’s decision to come up with a preventive algorithm such as this did not happen overnight. While the address poisoning scam is not exactly new, addressing the issue became a matter of urgency nearly two weeks ago. That was when an unnamed trader lost a whopping $68 million to the scam. On May 3, the unidentified victim mistakenly sent $68 million worth of Wrapped Bitcoin (wBTC) to a spoofed address.
Although the bad actor later returned the funds after his location was revealed by on-chain investigators, it was clear that that wasn’t their initial plan. The heat that the scam brought on was what gave the scammer cold feet.
Binance Introduces Game-Changing Algorithm to Combat Spoofing Scams
