CZ wants to ‘eradicate’ address poisoning after massive $50 million loss

Changpeng Zhao, co-founder and former CEO of Binance, has called on the crypto industry to take stronger and more coordinated measures to eliminate address poisoning scams.

The warning comes after a single victim lost nearly $50 million worth of USDT in what analysts describe as one of the largest chain phishing losses in recent months.

How a Single Copy and Paste Error Triggered a $50 Million Crypto Heist

The incident took place in less than an hour. According to on-chain data and security companies that followed the case, the victim withdrew funds from Binance and sent a small test transaction of 50 USDT to the correct destination address.

Minutes later, the user copied an address from their transaction history and sent 49,999,950 USDT to a different wallet that closely resembled the intended recipient.

The fraudulent address had been placed by attackers through a prior microtransaction, a common tactic used in address poisoning scams.

The victim’s wallet, active for about two years and primarily used for USDT transfers, sent the funds shortly after the withdrawal from Binance.

Initial reports indicated that the stolen USDT temporarily remained at the destination address, although similar cases show that funds are often quickly moved, exchanged, or laundered across multiple wallets.

In this case, blockchain researchers later noted that portions of the funds were converted to ETH and routed through various addresses, with some passing through the Tornado Cash mixer.

Zhao addressed the incident in a public post, describing it as a problem that the industry should be able to eliminate completely.

He proposed that wallets automatically flag and block known poisonous addresses using simple blockchain queries, warning users before transactions are sent.

He also urged industry security groups to maintain real-time blacklists that wallets could consult before execution and suggested completely filtering out spam transactions so that users don’t see dust transfers in their histories.

Binance Wallet, he said, already implements some of these protections.

As Address Poisoning Grows, Lawmakers and Stablecoin Issuers Intervene

Address poisoning, sometimes called dusting, is a form of phishing in which attackers send small amounts of cryptocurrency to wallets from addresses designed to look almost identical to legitimate ones.

When users then copy an address from their transaction history instead of a verified source, they may unknowingly paste the attacker’s address.

Matching the first and last characters of a wallet address is often enough to fool users, especially during high-value transfers.

Security companies say the tactic is growing as SlowMist and other analysts have flagged address poisoning as a growing threat, particularly on networks with low transaction fees where attackers can operate at scale.

TRM Labs has documented extensive dusting activity on the TRON blockchain, where free or near-free transfers allow bots to flood wallets with forged transactions.

Their research shows that attackers generate thousands of custom addresses and deploy automated systems that target recently active or high-balance wallets, especially those containing stablecoins like USDT.

The $50 million loss comes amid a broader rise in cryptocurrency-related fraud. Industry estimates suggest that nearly $90 billion has been lost due to hacks and exploits since the inception of cryptocurrencies, with more than $9 billion recorded in 2025 alone.

More than $276 million was stolen in November, and CertiK identified phishing as the most damaging scam category of 2024, accounting for more than $1 billion in losses.

US authorities reported that Americans lost approximately $9.3 billion due to crypto investment scams in 2024, a sharp increase year over year.

Lawmakers have also responded. US Senators Elissa Slotkin and Jerry Moran recently introduced the proposed SAFE Crypto Act

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