Binance Introduces Game-Changing Algorithm to Combat Spoofing Scams

As an analyst with a background in cybersecurity and experience in the cryptocurrency industry, I believe Binance’s new algorithm to detect and prevent address poisoning scams is a much-needed development. The growing number of cases of this type of scam poses a significant threat to investors, and it’s crucial that exchanges take proactive measures to protect their users.


The Binance exchange’s security team has developed a method for identifying and combating poisoning scams. This response comes in response to the increasing number of reported cases, which Binance believes is indicative of a troubling escalation in this type of fraudulent activity.

Security specialists at Binance have devised a solution, referred to as an “antidote,” which not only detects malicious addresses but also warns users before they transfer funds to potential scammers. These types of scams, also known as address poisoning or spoofing scams, deceive investors into unwittingly sending money to fraudulent recipients.

Scammers trick victims by sending a minimal amount of digital assets to a wallet address nearly identical to the victim’s, aiming to include this transaction in the wallet’s history. They hope that the unsuspecting victim may unintentionally transfer funds to the scammer’s own wallet address.

Binance’s Antidote to the Rescue

Based on a recent finding, Binance’s security team has identified over 15 million potentially malicious cryptocurrency addresses using their innovative detection algorithm. As mentioned in their announcement, this technique enables them to identify such addresses and protect users from related risks.

As a diligent researcher, I have played a significant role in uncovering and signaling over 13.4 million potentially fraudulent addresses on the BNB Smart Chain network, as well as approximately 1.68 million suspicious addresses on the Ethereum blockchain.

The algorithm identifies potentially poisoned addresses by screening out dubious transactions. Such transactions are characterized by insignificant value or worthless token transfers. Subsequently, it matches these addresses with potential victim addresses. Lastly, it adds a timestamp to the suspected transactions to help determine the likely motive behind the poisoning.

Following the collection of this data, Binance’s Antidote team proceeds to register the suspicious addresses with Hash Dit, their collaborating Web3 security firm, for further analysis and protection.

Address Spoofing Scam: A Growing Menace

I’ve previously mentioned that Binance’s implementation of this preventative algorithm wasn’t a spur-of-the-moment decision. The issue of address poisoning scams isn’t novel, but its urgency became apparent about two weeks ago. This was when an anonymous trader suffered significant losses, to the tune of $68 million, due to falling victim to such a scam on May 3rd. Unfortunately, this unsuspecting investor transferred $68 million worth of Wrapped Bitcoin (wBTC) to a fraudulent address.

Despite returning the stolen funds following discovery by on-chain detectives, it was evident that the crook hadn’t intended to do so originally. The scrutiny and resulting pressure from the scam unnerved them.

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2024-05-16 15:37