Binance Introduces New Algorithm to Combat Address Spoofing Fraud
Binance, the largest centralized cryptocurrency exchange, has announced the launch of a new algorithm aimed at combating fraud related to address spoofing. This method of fraud involves sending a small amount of digital assets from addresses similar to the victim’s address. When the victim later copies the address from their transaction history, they may accidentally send funds to the fraudster.
The developed algorithm by Binance helps detect such fraudulent activities by identifying suspicious transactions with minimal amounts or unknown tokens. It also analyzes sender addresses and matches them with potential victims to identify and flag suspicious activities based on the timing of transactions.
Fraudulent addresses used in spoofing are now being recorded in the HashDit company’s database, with which Binance is collaborating. This database will be available to other crypto projects to enhance their protection. In particular, companies like the Trust Wallet crypto wallet will use the HashDit API to warn users about attempts to transfer funds to spoofing addresses. Additionally, the algorithm will be integrated into browser extensions and MetaMask Snaps for further control over fraudulent addresses.
Since the launch of the new algorithm, Binance has already detected over 13.4 million spoofing addresses on the BNB blockchain and over 1.68 million on the Ethereum blockchain. This initiative comes in light of a recent incident where a trader lost $68 million in wBTC by sending funds to a spoofing address. The funds were returned by the fraudster after 10 days, likely due to active blockchain analysts’ investigation.
Fraud involving address spoofing often relies on users’ carelessness, as they often only check the first and last characters of an address. The interfaces of most platforms also do not display full addresses without additional actions, making them even more vulnerable to such attacks. Binance’s new algorithm is aimed at protecting users from such risks and enhancing security in cryptocurrency operations.
