Cryptocurrency Address Attacks: How Scammers Steal Your Crypto & How to Stay Safe

Introduction

Cryptocurrency transactions heavily depend on public addresses. When you want to send your crypto to another wallet or to a friend, you should provide the public address or the recipient address to your exchange or your wallet so that your exchange or personal wallet can initiate the transaction and send crypto to that specific address.

Wallet addresses or public addresses are a very long string of characters and numbers which make it very difficult to remember, therefore we always tend to copy and paste or find the easiest way to provide them when carrying out crypto transactions.

Cybercriminals have taken advantage of this and therefore developed very sophisticated scams that trick users into sending their crypto into scammers crypto addresses.

In this article, I will cover 3 common crypto address scams that are out there to get you. I will explain them with examples and also show you how to stay safe and secure your cryptocurrencies in this digital space.

1. Address Poisoning Attack

Address poisoning happens when a scammer sends very small amounts of cryptocurrencies to your crypto wallet address so that they can include their crypto receiving address in your wallet’s transaction history, which you might later mistakenly use.

Let's see a practical example:

Assume your wallet’s public address for receiving Tron (TRX) is:

 0x5A3C9B12D8F67E0A4C21B6F8E93D4F0B8E7A2C3D.

A scammer wants to deceive someone into sending their TRX to the scammer’s address. After searching for the most active public TRX addresses, the scammer finds yours to be frequently used for large transactions.

Using AI tools, the scammer generates a TRX address that closely resembles yours. To do this, they copy the first 4 characters and the last 4 characters of your TRX address and create a new scam address. This is known as a vanity address.

Scammer’s generated TRX public address: 0x5A7F4D91A2E6C08B35FA12C79D5E3B0C6E2C3D.

From their new vanity or scam address, the attacker sends tiny amounts of TRX to your real public TRX address. Your wallet receives these small amounts and logs them in the transaction history, displaying them as recent transactions in your TRX account.

When you need to receive TRX, you may opt to quickly copy your TRX public address from your recent transaction history in the wallet. However, this convenient shortcut can trick you into clicking transactions that came from the scammer.

In the example above, all the transactions you see under the recent transactions section are from the scammer, and most wallets do not flag these types of transactions because they do not control the blockchain.

As a result, you may mistakenly click on the scammer’s transaction and copy their TRX public address, mistaking it for your own.

Eventually, when you try to deposit TRX into your wallet, you might end up losing your TRX by mistakenly sending it to the scammer's public address instead of your own.

💡How to avoid:

✅Never ever go to your recent transactions history to copy your public address to receive crypto to your wallet. A simple shortcut can cost you a lot of money! Attackers always find new ways to steal your crypto, so always follows the best practice to receive crypto.

2. Dusting Attack

A dusting attack is a sneaky way for hackers or blockchain analysts to track crypto users and de-anonymize them. Scammers send tiny amounts of crypto, (called "dust"), for example 0.000001 XRP, to multiple wallets and watch where that dust moves.

This dust gets bundled with the crypto balances in users' wallets and users are likely to spend this dust unknowingly. But this is not the problem though, the issue is that since users spend these dusts, the attackers can now track where their dust moves among wallets.

Actually, dusting is not a direct attack to steal your crypto, rather it’s an attempt with a long-term goal to trace your crypto movements among wallets and know your real identity so that attackers can specifically target you and come up with creative ways to steal your crypto. 

⚠️Dusting and address poisoning can go together. Attackers can send small dust with their vanity addresses. 

This way, attackers can achieve both: they can steal your crypto if you mistakenly select their lookalike address from your recent transaction history, and they can track your wallet activity if you spend the dust they sent. One attack, two outcomes, like hitting two birds with one stone!

💡How to avoid:

✅Dusting cannot be prevented since anyone can send crypto to your address, and wallets cannot block incoming transactions as they don’t control the blockchain. However, some wallets, like Electrum, Wasabi, and Samourai, allow UTXO selection, letting users avoid spending dust amounts. Still, this feature is rare and impractical for most users.

3. Clipboard Hijacking in Crypto

Clipboard hijacking in simple terms is a malicious software installed into your mobile or computer by hackers that allows them to take control of your clipboard without your knowledge.

In the crypto space, hackers exploit both mobile and desktop applications to infiltrate your device and take control of the clipboard buffer memory. They continuously monitor your clipboard, waiting for a cryptocurrency address to be copied.

When you copy a cryptocurrency address, it is temporarily stored in the clipboard buffer. The moment the malware detects a crypto address—whether it’s Bitcoin, Ethereum, or another—it swiftly recognizes the format and, within seconds, replaces it with the attacker's address.

As a result, when you paste the address, you’re unknowingly pasting the attacker's address instead of your intended one. This process happens so quickly that you wouldn’t even realize it had occurred!

Real life examples of clipboard hijacking in cryptocurrency includes:

• CryptoShuffler Trojan (2017)
• Bitcoin Stealer Malware (2018)
• Clipboard Hijacker Monitoring 2.3 Million Addresses (2018)
• HackBoss Malware (2019)
• Clipboard Hijacking via Browser Extensions (2020)
• Clipminer Malware (2022)

💡How to Avoid:

✅The best practice is to always double-check your public address, even if you copy and paste it.

✅Purchase a reputable software anti-Virus guard installed on you mobile as well as on your PC.

Final Thoughts

Cryptocurrency public address attacks are becoming increasingly common. Since attackers cannot easily hack private keys, especially when crypto is stored in cold wallets, they devise new, creative ways to steal your funds.

To protect your crypto, staying informed is your best defense. If you're unaware of these scams, you could easily fall victim. You don’t need to be a mastermind to manage your digital assets—just stay updated and cautious.