Bitcoin Address Poisoning Attacks

Jameson Lopp, the chief security officer at Bitcoin custody company Casa, has recently sounded the alarm on Bitcoin address poisoning attacks.

These attacks are a form of social engineering scam where malicious actors generate Bitcoin addresses that closely resemble those from a victim's transaction history.

The goal is to trick users into sending funds to the malicious address by exploiting the similarity in the addresses, often matching the first and last digits of legitimate addresses.

The first such transactions were identified in block 797570 on July 7, 2023, with 36 transactions. After a quiet period, these attacks resumed in December 2023 and continued until January 2025, with a brief pause before resuming again.

Over 18 months, nearly 48,000 transactions fitting this pattern were detected on the Bitcoin blockchain.

In March 2025, address poisoning attacks resulted in losses of over $1.2 million, following $1.8 million in losses in February.

Lopp advises Bitcoin users to be vigilant and thoroughly review destination addresses before sending funds. He also advocates for better wallet interfaces that fully display addresses to mitigate these risks.

These attacks highlight the evolving nature of cybersecurity threats in the cryptocurrency space and the need for enhanced security measures to protect users' assets.

Bitcoin holders can protect themselves from address poisoning attacks by following these best practices:

1. Double-Check Wallet Addresses
Always verify the entire wallet address before sending funds, not just the first and last few characters, as scammers often mimic these parts.

2. Avoid Copy-Pasting Addresses
Refrain from copying wallet addresses from transaction histories since they might have been "poisoned" with fake addresses. Instead, manually enter the address or retrieve it from a trusted source.

3. Use Address Books or Contact Lists
Save frequently used wallet addresses in a secure contact list within your wallet application to avoid relying on transaction history.

4. Send Test Transactions
For large transfers, send a small test transaction first to ensure the funds reach the intended recipient before transferring the full amount.

5. Utilize Name Services
Use blockchain name services like Ethereum Name Service (ENS) or Binance Smart Chain Name Service (BNS). These are easier to verify and cannot be spoofed.

6. Set Up Alerts
Enable notifications for transactions involving your wallet to detect any suspicious activity promptly.

7. Use Hierarchical Deterministic (HD) Wallets
HD wallets generate a new address for each transaction, reducing predictability and making it harder for attackers to mimic your transaction history.

8. Leverage Hardware Wallets
Store private keys offline using hardware wallets, which are less vulnerable to attacks compared to software wallets.

9. Regularly Update Wallet Software
Keep your wallet software up-to-date to benefit from the latest security enhancements against such attacks.

By adopting these measures and practicing vigilance, Bitcoin holders can significantly reduce their risk of falling victim to address poisoning scams.

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