Crypto Scam: Wallet Holder Escapes $129M USDT Loss

A wallet holder unexpectedly recovered $129 million USDT from a crypto scam attack.

The cryptocurrency space, known for its innovative strides, is increasingly becoming a crypto scam ground after a wallet owner recently avoided a $129 million USDT loss. According to the blockchain security platform Scam Sniffer, the funds stolen in a phishing attempt were unexpectedly returned hours after the attacker drained the wallet.

A Crypto Scam Through Address-Poisoning Attacks

Recently, a cryptocurrency user was tricked by a sophisticated address-poisoning scam into sending $129 million to a fake wallet. The attacker constructed a wallet address that closely resembled the real one, complete with the same initial and final characters.

Despite completing a short test transaction, the victim failed to spot the subtle variations and unintentionally transmitted a considerable amount of USDT to the bogus address. In an unexpected move, the attacker returned the entire sum within hours to demonstrate competence or avoid legal consequences.

Although the hacker returned the funds, the episode clearly illustrates the dangers of this phishing method. Address poisoning is an attack that exploits users’ dependence on transaction history to replicate wallet addresses.

Fraudsters insert their fictitious address into transaction records and deposit tiny sums into victims’ wallets. Victims who utilize the bogus address for subsequent transfers become unintentional collaborators in their loss.

Industry Experts Highlight Growing Threats

According to blockchain security companies like Scam Sniffer and CertiK, address poisoning is becoming rampant in the cryptocurrency industry. This technique and wallet-draining schemes are among the phishing strategies that resulted in losses of over $800 million in 2024 alone.

Hence, Yu Xian, creator of the Web3 security company Slowmist, suggested deleting clipboard data after copying critical information. He also cautioned users about the intrinsic weaknesses of linked devices, recommending increased security precautions and verifying wallet addresses before transactions.

Rising Crypto Romance Scams

Recently, the FBI opened an investigation into a $5 million romance scam that preyed on 71 victims, most of whom were elderly, across the United States. Scammers use phoney dating sites and social media identities to entice victims.

Over long periods, they built confidence by posing as possible romantic partners, ultimately convincing victims to invest in phoney digital asset exchange platforms. The scam led victims to Bitkanant, a fake version of Bitkant, a genuine cryptocurrency exchange headquartered in Singapore.

The attackers contacted victims and informed them that their accounts were frozen after they transferred money. The con artists demanded huge sums to re-open the accounts. Still, these crooks often disappeared without releasing the money despite their victims’ compliance.

Older Adults Are A Common Target

According to the FBI’s 2023 Cryptocurrency Fraud Report, those aged 60 and older reported over 16,000 fraud cases, resulting in a total loss of over $1.6 billion. Due to their lack of experience with digital assets, this group is particularly vulnerable to various crypto scam schemes.

Romance scams frequently follow a predetermined pattern: con artists reach out via text messages, dating apps, or social media. They establish rapport by exhibiting romantic interest, sharing personal tales, empathizing with victims, and employing excessive flattery.

After building trust, these scammers initiate the topic of investments, which are usually bogus schemes. Victims are led through the investing process and presented with opportunities that appear to be lucrative, like binary trading or liquidity mining.

Crypto scam perpetrators use initial results to boost confidence and entice more investments. However, when the victims try to withdraw their money, they face demands for extra payments, like taxes or fees, which accumulate to significant amounts.

Notably, according to complaints gathered by the Federal Trade Commission, the number of Americans aged 60 and above who have been scammed of $100,000 or more within 12 months tripled from 2020 to 2023. However, when the FTC considers the number of incidents that go unreported, that number probably rises to an estimated $62 billion.

Staying Safe From Any Crypto Scam

The rise in cryptocurrency scams shows how criminals’ strategies are changing and the need for urgent preventive actions. Romance perpetrators’ emotional manipulation emphasizes the importance of exercising skepticism when interacting online.

Individuals can protect their finances and well-being by identifying the warning signals of such scams, including incessant investment pitches or too-good-to-be-true investment returns. Crypto holders must also continually educate themselves about the new scam strategies in the ever-growing crypto sector.