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Etherscan recently announced that it will be placing a new implementation for zero-value token transfers. With this update, token transfers without any value would no longer be displayed by default through its blockchain explorer interface.
The blockchain explorer's latest action was made in response to a spike in phishing attempts through "address poisoning" a scheme that involves targeting recipients of undesired tokens with near-zero or zero-value tokens sent to their wallet addresses. In effect, these tokens "poison" the user's address and create misleading transaction histories without a user's prior approval.
Update: Zero-value token transfers are now hidden by default
— Etherscan (@etherscan) April 10, 2023
In recent times, 'address poisoning' attacks have phished unsuspecting users and spammed everybody else. With this update you won’t have to see these transfers anymore!
Before ➡️ After pic.twitter.com/F93pWDUJ7a
Address poisoning is done to deceive unwary users into sending valuable cryptocurrencies to the attacker's wallet address by mistake. To achieve this, threat actors use sophisticated software to create fake addresses that closely resemble the user's poisoned address, often sharing the same few beginning or ending characters.
When a user intends to make a transaction, they might inadvertently select the scam address from their wallet's transaction history, which now contains the unwanted zero-value tokens. This can lead to the user sending their funds to the attacker's address instead of the intended recipient.
Address poisoning scams are thus classified as phishing attacks. The unwanted tokens or the addresses receiving them cannot directly compromise the users' funds. However, unwanted non-fungible tokens (NFTs) may potentially compromise an address through interactions such as moving them between accounts or user profiles.
To mitigate the risks of address poisoning, users should avoid retrieving deposit or destination addresses from their transaction history. It is crucial to double-check each character of the destination address and ensure it matches the intended recipient's address when sending cryptocurrencies. Blockchain explorers play a crucial role to balance information and data across blockchains, and their stability and security is key to maintaining a robust crypto ecosystem.
Etherscan will still allow zero-value transfers to be viewed, but this must be manually enabled by a user through an option on the blockchain explorer's settings.
In a recent statement, Etherscan acknowledged the challenges in addressing scams and attacks, calling it "an infinite cat-and-mouse game." Between late November 2022 and February 13, 2023, zero-value token transfers resulted in a loss of $19 million from victims' wallets, according to a study conducted by Coinbase.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.