March 28, 2024
Latest Cryptocurrency News

Binance CEO CZ Warns Crypto Community of Deceptive New Scam

Changpeng “CZ” Zhao, the CEO of Binance, took to X (formerly Twitter) on Wednesday to caution his followers about a rising crypto scam targeting the community. This deceitful scheme involves the use of fake wallet addresses during transactions to defraud unsuspecting users.

The modus operandi of the scam involves generating addresses that start and end with the same characters as the user’s original address. The scammer then executes “dust transactions” to the target, which appear in the victim’s transaction history. If the victim inadvertently copies and pastes an address from one of these dust transactions, the funds end up in the hands of the scammer.

CZ shared an unfortunate incident where an experienced crypto operator fell prey to this scam on August 1, mistakenly sending cryptocurrencies worth $20 million to a dust address. Realizing the error immediately after the transaction, the operator urgently requested Binance’s intervention to freeze the Tether USDT before the scammer could access the funds.

One way to avoid falling victim to this scam is by using a blockchain domain, such as the Ethereum Name Service, which allows users to identify wallets using regular words instead of lengthy alphanumeric strings. Binance users can conveniently acquire such domains through the platform.

Security experts strongly advise against copying and pasting addresses from applications when transferring funds. Users are encouraged to utilize robust and unique passwords for their crypto accounts and activate two-factor authentication on their applications to enhance security.

Binance’s timely response in freezing the funds helped the user dodge a significant security incident. However, not all victims were as fortunate. In response to CZ’s warning, another user shared a similar scam experience where $20,000 USDT was sent to a dust address. Despite contacting Binance support within 20 minutes of the transaction, the victim was unable to freeze the funds, leading to their transfer to a crypto mixer, making recovery impossible after nearly 12 hours.

Similar security incidents have been reported by users of Coinbase, with victims falling prey to scams and phishing attacks related to the company’s services and applications. Scammers have allegedly contacted clients using domain names mimicking the crypto exchange. Staying vigilant and adopting robust security measures remains crucial in protecting oneself from such scams in the crypto community.

Image by jcomp on Freepik

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