• If you attempt to send cryptocurrency from your Metamask wallet to a flagged wallet, Metamask will show you a warning message that indicates that the destination wallet has been flagged.
• The Metamask team maintains a database of known malicious wallet addresses and uses it to flag wallets.
• Thanks to blockchain technology, information about the wallet you are dealing with is available in real-time.

Many users losing money to unscrupulous actors in the cryptocurrency market has become a pain point. While the type of scams they have fallen into differ, the pain is still a barrier for many. Metamask is testing a feature that will alert its users when they are dealing with a cryptocurrency adress flagged for fraudulent activity and misconduct.

As part of our ongoing commitment to keep our community safe and secure, we’re working with our friends @opensea and @blockaid_ on an experimental feature in @MetaMask that will warn users when interacting with known scams. pic.twitter.com/MPn9yE7utD

— MetaMask 🦊🫰 (@MetaMask) April 5, 2023

Metamask wallet scam warning

If you attempt to send cryptocurrency from your Metamask wallet to a flagged wallet, Metamask will show you a warning message indicating that the destination wallet has been flagged. The warning message will provide information on why the wallet is flagged, such as:

• Association with known scams or phishing attacks.
• Someone has reported the wallet for suspicious activity.
• The wallet belongs to a known fraudster or hacker

The warning message will also advise you to proceed with caution and to verify that you’re sending funds to the intended recipient. You’ll have the option to proceed with the transaction or to cancel it.

The Metamask team maintains a database of known malicious wallet addresses and uses it to flag wallets. They constantly update the database as they identify new scams and phishing attacks.

This is smart thinking by the team at Metamask and something that is necessary. This has the potential to save millions, if not billions, the worth of users’ crypto that they would otherwise lose unsuspectingly. We already have websites that track wallets associated with scams but building it into the user’s wallet functionality is the next step.

Half of the crypto users surveyed in the Kaspersky Global Cryptocurrency report stated they had fallen prey to some type of crypto scam. Metamask wallet’s feature could be somewhat of a game-changer.

Popular Cryptocurrency related scams

Many crypto-related scams exist, and likely, scammers are creating more at this very moment. Some popular scams exist, and you must be aware of them as we will briefly explore them below.

Phishing Scams

Phishing scams involve criminals sending emails or messages that appear to be from a legitimate source, such as a cryptocurrency exchange or wallet, to trick individuals into revealing their login credentials, private keys, or other sensitive information.

Ponzi Schemes

Ponzi schemes involve individuals investing in a cryptocurrency with the promise of high returns, but instead of generating legitimate profits, the criminals use new investor funds to pay off earlier investors.

Fake ICOs

Initial Coin Offerings (ICOs) are a fundraising mechanism used by some cryptocurrency projects. The ICOs involve criminals creating a fake website and promoting a fraudulent cryptocurrency, convincing investors to send their funds to a wallet controlled by the scammer.

Fake Wallets

Fake wallets are apps or websites that mimic legitimate cryptocurrency wallets, but instead of allowing users to store their digital assets securely, scammers use these platforms to steal users’ private keys or seed phrases.

Social Engineering Scams

Social engineering scams involve criminals tricking individuals into giving up their sensitive information by pretending to be someone else or creating a sense of urgency or fear.

Pump and Dump Schemes

In a pump-and-dump scheme, criminals artificially inflate the price of a cryptocurrency by spreading false information, then sell their holdings when the price is high, leaving unsuspecting investors with worthless assets.

Malware Scams

Malware scams involve criminals distributing malware through emails, websites, or social media platforms to gain access to victims’ computers or mobile devices. Hackers can use the malware to steal cryptocurrency from victims’ wallets or mine cryptocurrency without their knowledge.

Cryptojacking

Cryptojacking is a type of malware scam that involves criminals infecting victims’ computers or mobile devices with malware that uses its processing power to mine cryptocurrency without their knowledge or consent.

Impersonation Scams

Impersonation scams involve criminals posing as legitimate cryptocurrency companies or individuals, such as a celebrity or government officials. They trick individuals into sending them money or providing sensitive information.

Fake Airdrops

Airdrops are a marketing strategy used by some cryptocurrency projects to distribute free tokens or coins to users who meet certain criteria. Fake airdrops involve criminals creating fake social media accounts or websites to trick individuals into participating in a fraudulent airdrop.

Investment Scams

Investment scams involve criminals convincing individuals to invest in a fake cryptocurrency or promising high returns on existing cryptocurrency investments.

Advantages of Blockchain technology

Thanks to blockchain technology, information about the wallet you are dealing with is available in real-time. Something that traditional finance transacting solutions lack and yet sorely needed. Adding this as part of transacting makes the information available to users who need it most. You need to visit the website and enter the wallet address to find out about the wallet you are dealing with. Check if it has been flagged before, as known databases require this action. The utility is the same but the additional step makes the process unattractive.

This feature is not foolproof. As we have noted multiple databases exist that track wallets associated with scams and phishing attempts. While Metamask curates its database well, there is no guarantee that it includes all known scams.

Additionally, not all wallets associated with the suspicious activity may be flagged. This has less to do with Metamask and more to do with the natural process of discovery. To add a scam to the database, one must acknowledge and report it to the database. Therefore, it’s important to exercise caution and do your own research before sending funds to any cryptocurrency wallet.

Overall, the new feature protects users from falling victim to scams and other malicious activities in the cryptocurrency space. We sincerely hope this is the first of many such initiatives. Perhaps it will eventually become a standard across all crypto wallet providers.