A crypto user lost $50 million in USDT after falling for an address poisoning scam in a massive onchain exploit.

The theft, spotted by Web3 security firm Web3 Antivirus, occurred after the user sent a $50 test transaction to confirm the destination address before transferring the rest of the funds.

Within minutes, a scammer created a wallet address that closely resembled the destination, matching the first and last characters, knowing most wallets abbreviate addresses and show only prefixes and suffixes.

The scammer then sent the victim a tiny “dust” amount to poison their transaction history. Seemingly believing the destination address was legitimate and properly entered, the victim copied the address from their transaction history and ended up sending $49,999,950 USDT to the scammer’s address.

These small dust transactions are often sent to addresses with large holdings, poisoning transaction histories in an attempt to catch users in copy-paste errors, such as this one. Bots conducting these transactions cast a wide net, hoping for success, which they achieved in this case.

Blockchain data shows the stolen funds were then swapped for ether ETH$2,977.17 and moved across multiple wallets. Several addresses involved have since interacted with Tornado Cash, a sanctioned crypto mixer, in a bid to obfuscate the transaction trail.

In response, the victim published an onchain message demanding the return of 98% of the stolen funds within 48 hours. The message, backed with legal threats, offered the attacker $1 million as a white-hat bounty if the assets are returned in full.

Failure to comply, the message warns, will trigger legal escalation and criminal charges.

“This is your final opportunity to resolve this matter peacefully,” the victim wrote in the message. “If you fail to comply: we will escalate the matter through legal international law enforcement channels.”

Address poisoning exploits no vulnerabilities in code or cryptography, but instead takes advantage of user habits, namely, the reliance on partial address matching and copy-pasting from transaction history.