Crypto Fraud & On-Chain Security Glossary
Clear definitions of the fraud patterns and security terms across the Web3 threat landscape.
A
Address Screening
Evaluating the risk exposure of a public wallet address by parsing historical transactions, smart contract interactions, and connections to illicit nodes (mixers, sanctioned entities) to calculate a risk score before a protocol accepts interactions or transfers.
AML (Anti-Money Laundering)
Laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. In Web3, AML compliance involves real-time transaction monitoring, address screening, and behavioural pattern tracking.
Anomalous Transaction Activity
Any sudden, non-standard spike or shift in transaction frequency, gas fees, or transfer amounts that deviates from established wallet or network behaviour — often an early indicator of exploit or flash loan preparation.
D
Drainer Kit (Wallet Drainer)
Malicious software sold on darknet forums or Telegram channels, including phishing frontends and smart contracts designed to trick users into signing approvals (e.g. SetApprovalForAll) that let attackers drain tokens and NFTs from the connected wallet.
F
Flash Loan Exploit
An exploit where an attacker takes an uncollateralized flash loan, manipulates a token's price on a DEX with the borrowed capital, and profits from arbitrage or a protocol imbalance — all within a single block.
H
Honeypot Contract
A malicious contract that lets users buy a token but blocks selling (via sell restrictions or 100% fees), letting creators withdraw all deposited capital at will.
L
Liquidity Pool (LP)
A smart-contract-secured pool of assets facilitating DEX trading — and a primary rug pull target when backing liquidity is removed.
M
Mempool (Memory Pool)
The staging area where pending transactions wait to be validated and added to the ledger. Scanning it lets security platforms detect frontrunning and malicious actions before execution.
Mixer (Coin Joiner / Tumbler)
A privacy protocol that pools assets from multiple addresses to obscure transactional paths. While mixers have legitimate privacy uses, they are frequently used to launder stolen assets.
P
Proxy Vulnerability
A risk in upgradable (proxy) contract architectures: compromised or malicious admin keys can swap the contract's logic for malicious code without changing the token address.
R
Real-Time Surveillance
Continuous block-by-block monitoring of network events — parsing pending mempool transactions and new blocks instantly, triggering alerts within milliseconds of an anomaly.
Risk Score
A value or tier assigned to a wallet or contract reflecting the probability of malicious intent, compliance exposure, or exploit history, based on machine-learning analysis.
Rug Pull
A scam where developers launch a project, inflate the price with marketing or wash trading, then withdraw the backing liquidity, leaving investors with worthless tokens.
S
Sybil Attack
A threat where one actor creates many coordinated pseudonymous wallets to gain disproportionate network influence, manipulate DAO voting, or farm airdrops.
W
Wash Trading
Market manipulation where an individual or coordinated group executes simultaneous buys and sells of the same asset to create artificial volume, mislead investors, and manipulate prices.