Binance Reports Suspected Dusting Attack on the Litecoin Network

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Litecoin, one of the most popular and most valuable crypto assets, has reportedly been hit with a dusting attack.

News of the attack was confirmed in a tweet by cryptocurrency exchange Binance. The tweet showed that there was a flurry of activity on the Litecoin network within about 5 hours leading to the tweet, leading the exchange to believe that a dusting attack had taken place.

Primarily, a dusting attack is an occurrence where scammers try to break the privacy of a crypto asset (in this case, Litecoin) by sending little amounts of it to private wallets. From there, the attackers try to trace the transactional activity of the wallets, and find who the owners are.

The dust moniker refers to the tiny fractions of tokens that are usually ignored by users. These amounts are also prominent on exchanges, as they are traditionally remnants of transactions that wallets have, and as thus, can’t be transferred anymore.

By sending any dust to bitcoin wallets, scammers could potentially be able to monitor the transactions and find out any links between them. However, regardless of how the attack is carried out, the purpose is usually the same; once the owners of the wallets have been identified, the scammers will be able to execute further scams.

In its tweet, Binance Academy linked to a transaction where a fraction of the coin (exactly, 0.00000546 LTC) was sent to about 50 Litecoin addresses. It believed that the transaction was pivotal to the attack, as it could signal the kick-off of the dusting process.

Currently, Litecoin is ranked at the fifth largest crypto asset by market capitalization on crypto market tracker CoinMarketCap. Following the announcement by Binance Academy, the value of the asset has plunged about 3.7 percent, with its price being pegged at $85.50 at press time.

Dusting has been a rather widespread security threat as far as crypto security is concerned. Back in January, cryptoanalysis and security company CipherTrace published a research report in which it detailed some of the most prevalent threats to those who buy cryptocurrency, and while exit scams, Ponzi schemes, and fraudulent Initial Coin offerings (ICOs) were pointed out to be the most glaring, dusting was also said to be an up and comer.

Binance itself has had a bit of a quandary with security recently. Earlier this month, the world’s largest crypto exchange (by daily trading volume) fell victim to a hack where the scammers got access to a significant portion of its Know Your Customer (KYC) data.

In a report on the issue, the exchange detailed that the scammers had somehow gotten access to the information of over ten thousand Binance customers, and were threatening to release it all if a 300 BTC (about $3.5 million at the time) wasn’t paid.

In the report, Binance added that its review of the leaked information showed that they are all from 2018, when they collaborated with a third party KYC vendor in a bid to handle the high volume of trades on their platform at the time.

They added, “Currently, we are investigating with the third-party vendor for more information. We are continuing to investigate and will keep you informed.”

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About Jimmy Aki

Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.