Binance CEO CZ Warns Crypto Community About Emerging Scam

Binance CEO Changpeng “CZ” Zhao has issued a warning to the crypto community regarding a new and deceptive scam that targets users during transactions. The scam involves mirroring wallet addresses and sending dust transactions to trick users into sending funds to the scammer’s wallet.

How the Scam Works

The scammers generate fake wallet addresses that start and end with the same characters as the user’s original address. Once the mirrored address is created, the scammer initiates dust transactions, which show up in the victim’s transaction history. If the victim unknowingly copies and pastes the address from one of these dust transactions, the funds will be sent directly to the scammer.

A Costly Mistake

Recently, a seasoned crypto operator fell victim to this scam and mistakenly sent $20 million worth of cryptocurrencies to a dust address on August 1st. Fortunately, they realized the error immediately and contacted Binance to freeze the transaction before the scammer could access the funds.

Using Blockchain Domains for Safety

To avoid falling prey to this scam, users are encouraged to use blockchain domains like the Ethereum Name Service, which allows them to identify wallets using regular words instead of complex strings of characters. Binance users have the option to purchase domains through the platform.

Additional Security Measures

Security specialists recommend avoiding copying and pasting addresses from applications while transferring funds. It is also essential to use strong, unique passwords for crypto accounts and enable two-factor authentication on applications to enhance security.

Binance’s Timely Response

Binance’s quick response helped the aforementioned user avoid a significant security breach. However, not all victims were as fortunate. Another user replied to CZ’s warning, sharing a similar scam experience. Where they accidentally sent $20,000 USD to a dust address. Despite reaching out to Binance’s support team within 20 minutes of the transaction, no action was taken to freeze the funds. Consequently, the funds were transferred to a crypto mixer, rendering recovery impossible.

Similar Incidents on Coinbase

Coinbase users have also reported falling victim to scams and phishing attacks related to the company’s services and applications. Some scammers have even used domain names similar to the crypto exchange to deceive clients.

Protecting oneself from such scams requires vigilance and awareness. By adopting secure practices, such as using blockchain domains and double-checking addresses during transactions. Users can safeguard their crypto assets from malicious actors and ensure a safer crypto ecosystem.

By Ryan

Ryan is an author at CryptoPresales, With his expertise in the crypto industry, Ryan shares his insights on various aspects of the blockchain ecosystem, including token sales, decentralized finance, and emerging trends.