Overzealous scammers devised a new way to steal money from cryptocurrency wallets, despite hacks and scams taking center stage for the most of the last several years.
A recent type of phishing attack called “address poisoning” entails altering the transaction history after changing the Secret Recovery Phrase. The primary distinction between address poisoning and the typical scamming method is that the former heavily depends on the user’s negligence.
The Workings of Address Poisoning
Leading Defi Crypto wallet provider MetaMask wrote a lengthy blog post alerting cryptocurrency lovers worldwide to the dangers of address poisoning and advising them to double-check their wallet addresses, which are composed of unique alphanumeric strings, in order to avoid losing money. The perpetrator typically uses the victim’s transaction history as the first tactic in these address poisoning operations. The fraudster must create fake addresses that are similar to a user’s in order for address poisoning to be successful.
Because cryptography generates hexadecimal numbers that are difficult to recall, hackers implant these new, fictitious addresses in fraudulent transaction histories. Typically, it’s quite challenging to visually distinguish between a phony and real cryptocurrency wallet address.
The second technique involves a scammer creating a cryptocurrency wallet address that looks similar. They transfer a modest amount to the freshly established cryptocurrency wallet address. The user’s cryptocurrency wallet is then “poisoned.” This is due to the fact that the hacker’s new address, which is not visually distinguishable as being different, is displayed in the transaction history on MetaMask or any other DeFi wallet. The beginning and ending characters of the wallet are typically used by cryptocurrency aficionados to visually identify it, but the middle portion of the address is either hardly ever remembered or is virtually never recalled.
The hacker can taint the wallet’s dummy addresses with this type of merge. Many times, the money wind up in the virtually identical-looking wallet of the hacker when the unwary user tries to copy the crypto wallet address from the transaction log the next time.
Strategies leading to poisoning incidents
Media Access Control (MAC) Address Forgery
This is a method for altering a network interface’s factory-assigned Media Access Control (MAC) address on a networked device. A network interface controller’s (NIC) hard-coded MAC address cannot be altered. Nonetheless, a lot of drivers let you modify the MAC address.When a fraudster uses the MAC address of another device on the network to impersonate it, this is known as MAC address spoofing. When this is done, it can be exploited to pretend to be a genuine device or obtain unauthorized access to a network.
Address Resolution Protocol (ARP)
Using this communication protocol, one can find the link-layer address (MAC address, for example) linked to a specific internet layer address (usually IPV4 address). This mapping serves a crucial purpose in the Internet protocol suite. Sending malicious ARP packets to a local area network is the method used in this poisoning attack to conflate a phony MAC address with a legitimate IP address. As a result, network traffic is diverted via the fraudster’s computers, giving them the ability to launch Man-in-the-Middle attacks.
Domain Name System (DNS) Poisoning
Cache poisoning is the process by which bogus data is added to a domain name server’s DNS cache. This leads to DNS queries returning false positives, resolving domain names to erroneous IP addresses, and directing visitors to malicious websites while jeopardizing their privacy.
Rogue Dynamic Host Configuration Protocol (DHCP) Servers
A DHCP server is located on a network that isn’t managed by the authorized network workers. A fraudster connects a network device—like a router or modem—to the network. In order to provide IP addresses and other network configuration settings to gullible devices, fraudsters install rogue DHCP servers on a network. Traffic redirection and data interception follow from this.
BGP (Border Gateway Protocol) Hijacking
This is an Internet-wide routing protocol. Any host that is linked to the Internet and can be uniquely identified by its IP address can link to any other host, wherever in the world. By constantly bringing each packet closer to its destination until it is, hopefully, delivered, data is passed from one router to another. An attacker can maliciously reroute internet traffic through BGP hijacking. They pretend to be the proprietors of IP prefixes that they neither own nor control.
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DNS tunneling circumvents network security mechanisms by encoding data that a fraudster wishes to exfiltrate from a compromised network into DNS requests and responses. In order to intercept and decode DNS communication, the fraudster sets up a command and control server. Then, by encoding data into DNS queries and responses, they built a DNS tunnel. The C&C server reassembles the data after it has been split up into smaller packets and sent in several inquiries or answers.
Repercussions of attacks using address poisoning
Attacks such as “address poisoning” have the potential to seriously harm both specific users of the bitcoin network and the overall stability of the blockchain. These attacks usually result in significant financial losses for their victims since fraudsters may take possession of cryptocurrency assets or modify transactions to redirect money to their wallets. In addition to causing monetary losses, these assaults could cause users of bitcoin networks to lose faith. If users become victims of fraudulent schemes or have their possessions stolen, it could negatively impact their belief in the security and reliability of blockchain networks and associated services.
Furthermore, certain address poisoning attacks, such Sybil attacks or the improper use of smart contract vulnerabilities, can stop blockchain networks from functioning properly, causing delays, congestion, or unanticipated outcomes that have an impact on the ecosystem as a whole. In order to lower the risks of address poisoning attacks, these consequences emphasize the necessity of robust security mechanisms and user awareness within the cryptocurrency ecosystem.
How to Combat Address Poisoning Attacks
Thankfully, there are a number of tried-and-true strategies that can assist in combating cryptocurrency scammers from taking your digital assets. Naturally, verifying the cryptocurrency wallet addresses twice before transferring the money is the simplest way to solve this issue. For cryptocurrency fans who are worried about being contaminated with address poisoning, here are two more sophisticated alternatives.
Cold Wallet Implementation
Using cold wallets is a practical method of saving oneself from the headache of recovering misplaced cryptocurrency coins. It is well known that the likelihood of being hacked is decreased when one has a cold hardware wallet. As a result, a self-custody wallet that is not online is less vulnerable to phishing scams carried out by unscrupulous computer experts. Furthermore, cold hardware wallets develop the habit of reviewing and validating each transaction that is sent.
The usage of cold wallets ensures additional security since, in this scenario, “test transactions” provide a second layer of protection. Sending a little amount of money and then waiting for confirmation that the recipient’s address is accurate are the steps involved in carrying out these transactions. However, because they cost twice as much in gas, test transactions are disliked by the cryptocurrency community.
Even while there are techniques to prevent scammers from transferring funds from your cryptocurrency wallet to theirs, it is still advisable to exercise extra caution and develop the routine of constantly monitoring your cryptocurrency wallets.
Use an address book
Having an address book instead of copying cryptocurrency wallet addresses from personal transaction history should be the best and safest course of action when it comes to most address poisoning attempts. This tool can ensure the security of your digital assets in the cryptocurrency network wallet. To access it, navigate to Settings > Contacts on MetaMask.
By using this easy method, you can immediately resolve two problems. One issue that has been resolved is that the wallet owner won’t need to copy and paste the addresses, eliminating the chance of pasting a fake address. Before adding addresses to the address book, an additional security measure known as confirmation is required. This makes it difficult for the con artists to alter the addresses that the wallet owner submits.
Utilize a name service
Because name service addresses are impossible to replicate and far more difficult to fake because to their short length, they can offer an extra degree of security. Examples of these services are the Ethereum Name Service (ENS) and the BSC Name Service (BNS).
Use only trusted sources
By using reliable sources, you can avoid falling victim to con artists’ fraudulent schemes and obtain the wallet address of the actual recipient in a secure manner. Using official websites, verified user accounts, social media platforms, or any other verified communication route could be considered one of these trustworthy wallets. Consequently,
Never use addresses you receive from unreliable sources or click on links; also, never use past transactions to determine the recipient’s address without first verifying it again before proceeding.
Configure transaction alerts
The digital instruments of this era of digital assets facilitate and ease use of the digital network. Certain tools, for instance, let users configure alerts to tell them anytime a transaction is made to or from their address when certain smart contracts are linked to. Users can verify regular transactions with these alerts, flag transactions that seem suspicious when linked to their wallet address, and disregard any additional links to their address.
Routine updates for software and systems
At a time like this, when there are scammers in every area of the cryptocurrency ecosystem, having updated and safe software is crucial. Even though preventing fraud is our main goal, having updated software has many other benefits as well. These include data protection, enhanced system performance and guaranteeing that your system is operating at peak efficiency, software compatibility with the newest technologies, and many more benefits.
Intrusion detection systems (IDS) placement
The risk of falling victim to an address poisoning attack can be entirely eliminated by setting up intrusion detection systems and connecting them to your digital wallets. Address poisoning attacks operate by tricking a user into sending funds to a wallet they believe to be their own or someone they regularly transact with. Since most cryptocurrency wallets now include these intrusion detection systems, setting them up is simple.
Harden network configuration
As was already noted, the digital instruments available in this era of digital assets facilitate and ease the use of the digital network. You must protect your network in order to prevent fraudsters from accessing your high-end network. You can do this by using digital tools such as advanced endpoint detection, virtual private networks, firewall settings, encryption, and strong authentication techniques. This prevents hackers and unauthorized users from accessing your network without your permission, protecting your digital assets and any other data.
Ongoing education and training
Possessing the expertise required to manage operations in the cryptocurrency ecosystem is essential in this day of cybersecurity. This entails providing your team with sufficient training and knowledge on how to recognize and handle poisoning attacks, the hazards associated with the network as a whole, and how to avoid becoming a victim of one. To guarantee the prevention of these malware attacks, a number of crucial and important steps must be taken. They can help a lot in preventing these attacks; they include using strong passwords and avoiding downloading attachments and clicking on dubious links.
Address poisoning attacks are simply one of the numerous difficulties and dangers that users of crypto networks nearly always have to deal with. In the age of address poisoning assaults, knowledge truly is power, and the greatest defense against scammers is to remain knowledgeable about these threats and how to avoid them. Crypto network users can protect themselves from these attacks and other dangers present in the digital sphere by keeping informed.
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