The cryptocurrency community has been put on high alert by Binance CEO Richard Teng, who recently issued a warning about a new scam known as “share-seed-phrase.” This deceptive tactic is being used by fraudsters to trick unsuspecting victims into transferring their funds to wallets controlled by the scammers.
In a post on Feb. 18, Teng explained how the scam operates. Scammers impersonate crypto professionals and approach victims, claiming that their accounts have been compromised. They then instruct the victims to import a specific seed phrase to secure their assets. Once the victims transfer their crypto to the supposed safe wallet, the fraudsters swiftly drain the assets, leaving no trace behind.
Binance has urged users to remain vigilant and avoid engaging with unsolicited messages from individuals posing as company representatives. The exchange emphasized that it never asks for sensitive information like seed phrases and advised users to verify communications through official channels.
The sophistication of crypto scams continues to evolve, as demonstrated by this latest scam. While scammers traditionally try to steal seed phrases to access wallets, the “share-seed-phrase” scam flips the script by providing victims with a seed phrase to lure them into transferring funds before emptying the wallet.
This type of scam is reminiscent of a scheme that emerged on social media platforms last year. Scammers would publicly share seed phrases in comment sections, posing as beginners seeking help. Users who attempted to access these wallets often found themselves duped, falling victim to their own curiosity and dishonesty.
Security experts warn that cybercriminals will continue to refine their tactics as digital assets become more popular. According to data from DeFiLlama, over $100 million has already been stolen from crypto investors this year.
It is crucial for users to remain cautious and skeptical of any unsolicited messages or requests for sensitive information. By staying informed and verifying communications through official channels, individuals can better protect themselves from falling victim to sophisticated scams in the cryptocurrency space.