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Cryptocurrency trader loses $68 million after falling for address poisoning scam

ByVrinda Jain
May 07, 2024 06:04 PM IST

The wallet named "0x1E" fell for a scam called address poisoning and lost $68 million.

A cryptocurrency user lost $68 million in wrapped bitcoin (WBTC) after falling victim to an address poisoning attack. Cyvers Alerts, a "security company that provides real-time detection and prevention of crypto attacks", confirmed the incident and shared it on X.

The person fell for a scam and lost $68 million dollars. (Unsplash )

The wallet named "0x1E" fell for a scam called address poisoning. The perpetrator mimicked the 0.05 ether (a form of cryptocurrency) transaction before receiving 1,155 WBTC from the victim. (Also Read: How 5 Indian Americans allegedly laundered $30m in Cash-for-Bitcoin scam in New York)

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Address poisoning, as reported by Coin Desk, is a sophisticated strategy that involves replicating the first and last six characters of a genuine wallet address. This clever ploy aims to dupe the sender into overlooking the disparity in the intervening characters, leading to the transaction being sent to an incorrect wallet address. It's important to note that a wallet address can be up to 42 characters long.

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Earlier, cyber police caught the mastermind of a cryptocurrency scam where he defrauded investors of 1.10 crores by promising high profits. The accused, named as Santosh Thorat, filed an anticipatory bail application with the high court seeking protection from arrest, which was denied, prompting his quick arrest by police.

According to the cyber police, Thorat and his relatives offered investors 20% annual returns through the cryptocurrency Sonitex.

The accused had applied to the court for anticipatory bail, which was granted on the understanding that he would deposit 43.96 lakh as the first instalment and the remaining 65.94 lakh later. When the accused failed to make the required payments, he applied to the high court for anticipatory bail, which was denied. He then changed his phone number and residence address in order to avoid being arrested.

The investigation conducted by the cyber police led to his arrest in Kharadi on April 23, after which he was taken before the District and Sessions Judge Court.

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