Binance CEO warns of new stock seed scam, here are the points..
A new cryptocurrency scam dubbed the “share-seed-phrase” scheme has emerged as a serious threat to digital asset holders, prompting warnings from leading industry figures including Binance CEO Richard Teng.
The scam tricks users into transferring funds to supposedly “secure” wallets that are actually controlled by criminals.
Binance reports that scammers are specifically targeting users by posing as crypto professionals and exchange representatives, using urgency and fear to manipulate victims into compromising their assets.
How does the shared seed phrase scam work?
The scam follows a three-step process designed to create urgency and exploit users' security concerns.
Initially, victims receive unsolicited communications, usually SMS messages or phone calls, from scammers.
They pose as Binance representatives who claim that the user's account has been compromised.
These fake representatives create immediate anxiety by suggesting that user funds are in danger and need urgent protection.
The second phase involves the scammer providing a seed phrase, presented as access to a “secure wallet” where the victim must transfer their funds for safekeeping.
This reverses traditional crypto scam tactics. Instead of trying to steal the victim's seed phrase, the scammer provides one that he or she already controls.
The manipulation relies on victims understanding that seed phrases are important security tools.
However, it takes advantage of your possible lack of knowledge about how these phrases should be generated and managed properly.
The final stage occurs when victims transfer their cryptocurrencies to the new wallet, believing that they are protecting their assets.
Since the scammer provided the seed phrase, they have full control over this wallet. They can immediately empty any funds transferred to it.
