Binance CEO Richard Teng has issued a stark warning to crypto users. He alerted them about a rising scam that tricks victims into transferring their digital assets to fraudulent wallets.
This scam is called the “share-seed-phrase” scam. This scam exploits fear, tricking users into transferring funds to wallets controlled by fraudsters.
Teng took to social media to sound the alarm, cautioning crypto holders to remain vigilant.
In an official statement from Binance titled Share-Seed-Phrase Scams: A Binance Guide to Protecting Yourself Against a Rising Threat, the company detailed the mechanics of this scam and urged users to exercise caution.
How the Share-Seed-Phrase Scam Works
A seed phrase, also known as a recovery phrase, is a crucial security feature in cryptocurrency wallets. Consisting of 12 to 24 randomly generated words, it enables users to recover their funds if they lose access to their wallet. Unlike traditional phishing scams, where attackers try to steal a user’s seed phrase, this scam works differently. Instead of stealing a seed phrase, scammers provide victims with one. They then deceive the victims into transferring funds into wallets controlled by the fraudsters.
First, scammers pose as Binance representatives. They send messages or call victims. They falsely claim that the victim’s crypto wallet has been compromised. They insist that immediate action is needed to secure their assets.
Next, the scammers provide a seed phrase for a so-called “secure wallet.” They trick the user into setting it up. This is a major red flag. Legitimate crypto services never send seed phrases or request them from users.
Finally, once the victim transfers funds into the scammer-controlled wallet, the fraudsters act quickly. They drain the assets completely, leaving no trace.
How to Protect Yourself
Binance has outlined several measures to help users avoid falling victim to this growing threat.
The company emphasizes that it will never ask users to move funds for security reasons. It will also never request private keys or send seed phrases via SMS or email.
Teng advises users to stay skeptical of urgent security alerts. Scammers often use urgency to push victims into immediate action.
To enhance security, Binance urges users to verify all communications through Binance Verify. They can also contact official customer support for confirmation.
Crypto holders should create their own seed phrases. These should be stored securely offline.
It is crucial to use only official Binance platforms and apps from trusted sources. Any suspicious activity should be reported immediately. Users should also enable security alerts to keep their account information up to date.
Users must be cautious of unsolicited messages and calls claiming to be from Binance. Any request to transfer funds for security reasons or share sensitive account details is a red flag.
Scammers use urgency to pressure victims into making hasty decisions. Binance advises users to take their time and verify information before responding.
Avoiding unfamiliar links, phone numbers, and wallet addresses is also essential for maintaining security.
The rise of the share-seed-phrase scam underscores the evolving threats within the cryptocurrency space. Binance continues to urge users to remain cautious, verifying all communications and avoiding hasty financial decisions prompted by fear or urgency. Teng’s warning serves as a crucial reminder for crypto holders to prioritize security and be skeptical of unsolicited security alerts.
