CZ Advocates for Eradicating Address Poisoning After Significant $50 Million Loss

Changpeng Zhao, co-founder and former CEO of Binance, is urging the cryptocurrency community to unite and take decisive action against address poisoning scams.

Key Takeaways

Changpeng Zhao, former Binance CEO, calls for action against address poisoning scams after a $50 million loss.
A user lost nearly $50 million due to a copy-paste error involving a fraudulent wallet address.
Address poisoning is a growing tactic in crypto phishing, where attackers use similar wallet addresses to deceive users.
Zhao advocates for protective measures, including real-time blacklists and automatic wallet safeguards.
The rise in crypto-related fraud continues, with substantial financial losses reported in 2024.

CZ Advocates for Eradicating Address Poisoning After Significant $50 Million Loss

This call to action arises after a shocking incident where a single individual lost nearly $50 million in USDT, marking one of the most substantial on-chain phishing thefts in recent times.

Summary of the Incident

In a distressing turn of events, a user fell victim to a massive fraud scheme that unfolded in less than an hour. According to blockchain data and security experts, the victim first withdrew funds from Binance and sent a small test transaction of 50 USDT to the correct address.

However, moments later, the individual copied an address from their transaction history and mistakenly sent a staggering 49,999,950 USDT to a fraudulent wallet that bore a striking resemblance to the intended recipient's address. Attackers had previously planted this fake address through a tiny transaction, a common tactic in address poisoning scams.

The victim’s wallet, which had been in use for about two years primarily for USDT transactions, quickly sent the large funds following the withdrawal from Binance. Initial analysis indicated that the stolen USDT sat at the fraudulent address for a short time, although similar incidents often see the funds rapidly moved, swapped, or laundered across multiple wallets.

Blockchain investigators subsequently traced parts of the stolen funds as they were converted into ETH and sent through various addresses, some even passing through the Tornado Cash mixer.

In response, Zhao publicly condemned the incident and emphasized that the industry should be capable of eliminating such threats entirely. He suggested enhancements such as having wallets automatically flag and block known poisoning addresses via straightforward blockchain queries, alerting users before transactions are completed. Furthermore, Zhao urged security groups within the industry to keep real-time blacklists that wallets could reference prior to executing transactions. He also recommended filtering out spam transactions to prevent users from seeing negligible transfers in their transaction histories.

Binance Wallet, Zhao stated, already utilizes some of these protective measures.

The Rising Threat of Address Poisoning

Address poisoning, often known as dusting, is a deceptive phishing technique where attackers send negligible amounts of cryptocurrency to wallets from addresses that closely mimic legitimate ones. This enables attackers to create confusion, as unsuspecting users may later copy an address from their transaction history instead of a verified source, unknowingly pasting the fraudster's address.

Deceptively matching just the first and last characters of a wallet address can often trick users, especially during transactions of high value. Security experts are increasingly highlighting this tactic, noting that firms such as SlowMist have recognized address poisoning as a growing threat, especially on networks with low transaction fees facilitating widespread attacks.

Recent research from TRM Labs has revealed extensive dusting activities on the TRON blockchain, where either free or almost free transactions allow bots to inundate wallets with misleading transactions.

Research Findings on Address Poisoning

The research indicates that attackers create thousands of vanity addresses and deploy automated systems targeting recently active or high-balance wallets, particularly those containing stablecoins such as USDT.

Address Targeting Activities

The massive $50 million loss occurs in the context of an alarming rise in cryptocurrency-related fraud. Industry estimates suggest that nearly $90 billion has been lost to hacks and exploits since the birth of cryptocurrency, with over $9 billion reported in losses just in 2025 alone.

November saw over $276 million stolen, and CertiK identified phishing as the leading scam type in 2024, resulting in losses exceeding $1 billion. In addition, U.S. authorities reported that Americans lost about $9.3 billion to cryptocurrency investment scams in 2024, marking a significant increase year-over-year.

In light of these alarming trends, lawmakers are taking notice. U.S. Senators Elissa Slotkin and Jerry Moran recently introduced the SAFE Crypto Act, which proposes new measures to address these pressing issues in the cryptocurrency space.