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Crypto transfer error costs investor $3M in PYTH tokens

Crypto transfer error costs investor $3M in PYTH tokens

GrafaGrafa2024/11/26 10:00
By:Isaac Francis

An unnamed cryptocurrency investor recently lost over $3 million worth of PYTH (CRYPTO:PYTH) tokens after mistakenly transferring them to a scammer's wallet.  

The error occurred when the individual relied on their transaction history to copy an address, inadvertently selecting a fraudulent one.  

Blockchain analytics firm Lookonchain reported that the scammer exploited a method known as "address poisoning."  

The attacker created a wallet with the same first four characters as the victim's legitimate deposit address.  

By sending a negligible amount of cryptocurrency—0.000001 SOL, valued at $0.00025—to the victim’s wallet, the fake address appeared in their transaction history.  

Trusting the apparent match, the victim copied the counterfeit address and transferred 7 million PYTH tokens, valued at $3.08 million.  

Security experts warn that address poisoning preys on users' tendency to rely on transaction histories for convenience rather than verifying wallet addresses through trusted sources.  

In this instance, the victim failed to double-check the full unique identifier, a step that could have prevented the loss.  

The method of address poisoning involves two primary tactics: zero-value transfers and fake tokens.  

Scammers conducting zero-value transfers use legitimate token contracts to create misleading entries in transaction histories.  

Meanwhile, the fake token strategy involves creating counterfeit token contracts resembling genuine assets such as USDT or USDC, tricking users into interacting with fraudulent addresses.  

In May, an Ethereum (CRYPTO:ETH) user lost 1,155 Wrapped Bitcoin (CRYPTO:WBTC), worth $68 million, to a similar scheme.  

Other cases, including a $129 million address poisoning scam highlighted by anti-scam platform Scam Sniffer, underscore the importance of verifying wallet addresses before initiating transactions.  

At the time of reporting, the Pyth Network (PYTH) price was $0.4557. 

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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