Binance CEO warns of cryptocurrency scams

This scam uses fake wallet addresses to trick Binance users. The scammers create addresses that start and end with the same characters as the user’s original address. After creating the fake address, they send dust transactions, which are transactions of very small value, to the victim. If the user copies and pastes an address from the dust transaction, the funds will be sent to the scammer.

CZ revealed that an experienced cryptocurrency investor fell victim to this scam on August 1. After sending $20 million worth of Tether (USDT) to the fake address, he immediately realized he had been scammed and asked Binance to freeze the USDT.

Binance CEO Says Cryptocurrency Scams Are Getting More Unpredictable

Users can avoid the scam by using blockchain domains, such as the Ethereum Name Service (ENS) wallet address naming service. Blockchain domains 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 not to copy and paste addresses from apps to transfer funds. 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 the security breach, but other victims were less fortunate. Another user said he lost 20,000 USDT to a similar scam. Despite contacting Binance support within 20 minutes of the transaction, he was unable to freeze the funds. Nearly 12 hours later, the victim’s funds were transferred to a crypto mixer and were not recoverable.

Coinbase users have also reported similar security issues. Victims believe the scam is related to the company’s services and apps, as they contact customers using the cryptocurrency exchange’s domain name.

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