This scam uses fake wallet addresses to trick Binance users. The scammers create addresses with the same start and end characters as the user's original address. After creating the fake address, they send dust transactions (transactions of very small value) to the victim. If the user copies and pastes an address from a dust transaction, the money will be sent to the scammer.
CZ revealed that an experienced cryptocurrency investor fell victim to this scam on August 1st. After sending $20 million worth of Tether (USDT) to a fake address, he immediately realized he had been scammed and requested Binance to freeze the USDT.
Binance CEO says cryptocurrency scams are becoming increasingly unpredictable.
Users can avoid scams by using blockchain domain names, for example, the Ethereum Name Service (ENS) for wallet address naming. Blockchain domain names are similar to email addresses, allowing users to identify wallets using common words instead of a long string of letters and numbers.
Additionally, security experts advise users against copying and pasting addresses from apps to transfer money. To protect themselves, users should create strong passwords for their cryptocurrency accounts and enable two-factor authentication on apps.
Binance's prompt response helped users avoid security incidents, but other victims were less fortunate. One user reported losing 20,000 USDT to a similar scam. Although he contacted Binance support within 20 minutes of the transaction, they were unable to freeze the funds. Nearly 12 hours later, the victim's money had been transferred to a cryptocurrency mixer and could not be recovered.
Coinbase users have also reported similar security incidents. Victims believe the scam involves the company's services and applications because they contact customers using the cryptocurrency exchange's domain name.
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