Binance CEO warns crypto community about new scam

Binance CEO, Changpeng “CZ” Zhaoalerted his followers on X — formerly Twitter — of a sophisticated and increasingly popular scam targeting the cryptocurrency community, using fake wallet addresses to scam users.

The scheme generates addresses with the same start and end characters as the user’s original address. After creating a duplicate address, the scammer sends useless transactions that will be reflected in the victim’s transaction history. If the victim copies and pastes an address from one of the transactions “dust”the funds will be sent to the scammer.

According to Zhao, The victim of this scam on August 1st was a very experienced cryptocurrency user who sent $20 million worth of cryptocurrency to a dust address. The user realized the error immediately after the transaction and asked Binance to freeze Tether (USDT) before it gets to the scammer.

Fraud can be avoided by using a blockchain domain such as the Ethereum name service. Blockchain domains are similar to email addresses, allowing users to identify wallets using ordinary words instead of a long string of letters and numbers. Binance users can purchase domains through the platform.

Also, security experts do not recommend users to copy and paste the addresses of applications for transferring funds. Users are also encouraged to use strong and unique passwords for cryptocurrency accounts and enable two-factor authentication in apps.

Binance’s timely response helped the user avoid a major security incident, but others affected were less fortunate. Replying to Zhao’s thread, another user informed sending $20,000 to a dust address in a similar scam. However, after contacting Binance support within 20 minutes of the transaction, no option to freeze funds was provided. After almost 12 hours, the victim’s funds were transferred to the cryptocurrency mixer without the possibility of recovery.

Coinbase users have reported similar security incidents. Various victims have reported scams and phishing attacks related to the company’s services and applications, including allegations that scammers contact customers using the exchange’s domain name.

Clarification: The information and/or opinions expressed in this article do not necessarily reflect the views or editorial line of Cointelegraph. The information presented here should not be taken as financial or investment advice. All investments and commercial movement involve risk and it is the responsibility of each individual to conduct proper research before making an investment decision.

Keep reading:

  • ConsenSys Launches Fuzzing Tool to Test Vulnerabilities in Smart Contracts
  • Binance CEO Explains His Stablecoin Strategy
  • The cryptocurrency market lost $486 million in July 2023, the most since 2022
  • Bitcoin Bull Run Coming: Binance CEO Changpeng Zhao Reveals When
  • According to lawyers, SEC Chairman Gary Gensler proposed to Binance Advisor in 2019
  • SEC Lawsuit Alleges Binance.US and Changpeng Zhao Expose Customer Funds to ‘Significant Risk’
  • August 2nd Price Analysis: BTC, ETH, BNB, XRP, DOGE, ADA, SOL, MATIC, LTC, DOT

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About Ankur Jain

I'm Ankur Jain, and I'm thrilled to be part of the team as an editor. I call India my home, and I have a passion for crafting engaging and well-written articles. With a solid background of 7 years in this field, I bring a wealth of experience to my work. It's my pleasure to contribute to the informative and captivating content you'll find on Stay tuned for some exciting stories and news pieces coming your way!

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