- August 3, 2023
- Posted by: [email protected]
- Category:
Binance CEO Changpeng “CZ” Zhao recently issued a warning to the crypto community regarding an emerging and deceptive scam that has been increasingly preying on unsuspecting users during transactions. The scheme involves creating fake wallet addresses that closely mimic the original addresses of users, tricking them into unknowingly sending funds to scammers.
The way the scam works is by generating addresses with the same starting and ending characters as the user’s genuine address. To execute the fraud, the scammers send small amounts of cryptocurrency, known as “dust transactions,” to the target. These transactions appear in the victim’s transaction history, making the fake address seem more legitimate. If the user mistakenly copies and pastes one of these fake addresses, their funds will end up in the scammer’s wallet.
CZ shared a disheartening incident in which an experienced crypto operator fell victim to this scam, sending cryptocurrencies worth $20 million to a dust address on August 1. Fortunately, the user realized the error quickly and reached out to Binance for help. Binance responded promptly, freezing the Tether before it reached the scammer and preventing a major security breach.
To safeguard against such scams, CZ suggested the use of blockchain domains, like the Ethereum Name Service, which allow users to identify wallets using regular words rather than complex strings of characters. Binance users can conveniently purchase these domains through the platform.
In addition to blockchain domains, security experts advise against copying and pasting addresses from applications to avoid falling into such traps. They also emphasize the importance of using strong, unique passwords for crypto accounts and enabling two-factor authentication on applications to bolster security.
While Binance’s quick response protected one victim, others have not been as fortunate. Responding to CZ’s warning, another user shared their distressing experience of sending $20,000 USDT to a dust address in a similar scam. Despite contacting Binance’s support team within 20 minutes of the transaction, they were unable to freeze the funds. Sadly, after nearly 12 hours, the funds were transferred to a crypto mixer, rendering recovery impossible.
Similar security incidents have been reported by users of Coinbase as well, with scammers attempting phishing attacks and using fake domain names to exploit the company’s services and applications.
As the crypto space continues to evolve, staying vigilant and implementing robust security measures are essential to safeguarding oneself from potential scams and fraudulent activities. Being informed and cautious can significantly reduce the risk of falling victim to such deceptive practices.
