How to (Finally) Solve Cryptocurrency Phishing
Peace of mind without changing our names to “Not Giving Away ETH”
Half of all fraud in crypto is phishing. 10% of ICO funds are lost to phishing, accounting for over $600 million in losses in 2017 alone. Nearly $7M in ETH and BTC are phished every day. Some companies have even begun cancelling token sales because of the risk of phishing.
To put the magnitude of this problem in context, phishing on the Ethereum blockchain is 100 times more common than phishing in Automated Clearing House (ACH) systems, the world’s largest means of sending money electronically. If ACH payments had a comparable rate of phishing, almost $100 billion would be lost daily.
Coral is Working to End Blockchain Fraud
We’re doing this by building safeguards for blockchain payments. Consumer safeguards proved critical to the growth of the ACH payments system, and user safeguards will likewise be critical to the mass adoption cryptocurrencies.
Coral’s first safeguard is the Anonymous Blockchain Trust Score (ABTS or the Trust Score), which helps prevent users from falling prey to phishing scams.
Coral continuously scans the internet and Ethereum blockchain to identify phishing scams in real time, building the biggest database of fraudulent addresses available. This evidence of fraud, coupled with evidence of address custody and identity are then fed into a decentralized blockchain crawler, the Trawler. The Trawler graphs every P2P interaction on the blockchain and assigns a trust score to each address based on their importance and activity.
The Anonymous Blockchain Trust Score helps senders predict whether the recipient address is trustworthy while preserving user anonymity and autonomy. The trust score reflects the likelihood that the address has participated in a fraudulent flow of funds, enabling users to evaluate counterparty risk without having to know the identity of the other party.
Trust is graded on a scale of one to seven. Sixes and sevens indicate a very trusted address, while ones and twos are untrusted or demonstrably fraudulent.
What does Phishing Look Like?
The Nigerian Prince Scam was basically dead. People caught on that if you send money to some random guy claiming to be an out-of-luck prince, you probably won’t get your money back. But with the growth of crypto, this scam has come back with a vengeance.
The basic flow is that an account like Elon Mmusk (note the additional ‘m’) will post that he’ll 10x anything you send. One of these scams claimed that if you send them enough bitcoin, you’ll eventually be able to earn 22 million Bitcoin (Yeah… 22). But these scams are wildly successful, some collecting hundreds of ETH.
The problem has gotten so bad that Vitalik Buterin changed his Twitter name to “Vitalik “Not giving away ETH” Buterin”.
Coral Integrates with Blockchain Platforms to Protect Users
Coral Protocol integrates into the existing UX of wallets and exchanges. When you enter an address to send crypto, the trust score automatically pops up and tells you whether you can trust this address. If the address is a phishing address, a pop up will appear and tell you that the address is untrustworthy.
Coral Enhances Platform Compliance
Coral’s trust score enhances blockchain transaction KYC / AML compliance, reducing compliance risk. Coral’s predictive trust score helps platforms avoid onboarding fraudulent funds and its challenge deposits enable them to validate address custody. More details on how Coral enhances customer due diligence for blockchain platforms will come in a subsequent post.
Coral is the Foundation of Universal User Protections on the Blockchain
Coral is building the foundation for universal consumer protections on the blockchain, a critical step to a global decentralized financial system. Coral’s core protocol will evolve into a developer’s platform, enabling community-driven security applications that secure every application of blockchain transactions.
Coral is built by Silicon Valley startup veterans who have together founded over ten companies and have had several exits. We are developers, engineers, designers, investors, and blockchain researchers who know payments and fraud inside and out and know how to build and decentralize world class products.
Read more about our founding team here.
Interested in contributing or collaborating? Join our reef: