Crypto Wallet Alert: $50 Million USDT Lost in Major Address-Poisoning Attack

• A single user lost nearly $50 million in USDT to an address-poisoning scam.
• The stolen funds were converted to ETH, split into multiple wallets, and partly moved into Tornado Cash.
• Experts warn that wallet UX flaws and verification gaps make large transfers highly vulnerable.

A single crypto user recently lost almost $50 million in USDT after falling victim to an address-poisoning scam, according to monitoring by SlowMist.

The incident occurred when the user mistakenly copied a malicious address that closely resembled the intended recipient’s address. The transfer involved 49,999,950 USDT, sent to an attacker-controlled wallet.

Source: X

SlowMist’s founder highlighted the deceptive similarity between the addresses. The attacker’s address shared the same first three and last four characters as the victim’s intended recipient address, making it extremely difficult to distinguish in the transaction history.

The stolen funds were quickly converted into Ethereum (ETH), dispersed across multiple wallets, and partly funneled into Tornado Cash, a privacy-focused mixing service, complicating recovery efforts.

Also Read: Florida Man Loses $317,000 After Falling for a Crypto Scam

Victim Issues On-Chain Demand for Fund Return

Following the theft, the victim posted a message on the blockchain network to the attacker concerning the return of 98% of the stolen amount within 48 hours.

The message read that the attacker could take the remaining $1 million as a “white-hat bounty” if the amount was returned.

Source: X

The message further indicated that if the deadline was not met, the matter could be escalated to the legal and international law enforcement agencies.

From previous occurrences, it has been demonstrated that the address poisoning scams can be reversed in some situations.

These include the 1155 WBTC scam, in which the perpetrator returned the value. Receiving the money, though, might be a challenge, especially if it moves between several wallets.

Industry Concerns Over Crypto Wallet Design and User Practices

According to crypto specialists, such as a member of the community named Crypto Reply Guy, the real issue is with how wallets feel and function. A large number of wallets ask users to click on addresses among their transactions.

This causes huge transactions to be vulnerable to errors or attacks. Huge transactions could be divided by errors or by attacks that occur based on how people interact with their wallets.

The Crypto Reply Guy urged better screening for large crypto transactions. This could involve address allowlists, clear whitelisting, human verification, and other security safeguards.

The widening gap between advanced crypto technology and poor consumer security practices continues to result in large financial losses, as seen in this $50 million loss.

Also Read: U.S. Justice Department Seizes Crypto Scam Domain Linked to Southeast Asia