How to protect yourself from the new cryptocurrency scam that is on the rise?

Bitcoin and other cryptocurrency scams continue to evolve, and now scammers have found a new way to trick users. This scheme relies on manipulation to gain control of wallets and drain their funds. Find out how this scam works and what steps you can take to avoid falling into the trap.

How to protect yourself from the new cryptocurrency scam that is on the rise?

Cryptocurrency scams are on the rise, and Binance has warned of a new tactic being used by cybercriminals. Known as the “seed phrase sharing” scam, this technique puts unsuspecting users’ funds at risk. Scammers pose as Binance representatives or cryptocurrency experts to trick victims into transferring their money to wallets controlled by the criminals.

Following the events of Argentina's President Javier Milei spreading a scam, knowing how to identify these tactics and acting with caution can prevent irreversible losses. Below, we break down the process of this scam and how you can protect yourself.

How do scammers operate?

How to protect yourself from the new cryptocurrency scam that is on the rise?

Binance has explained that this scam is based on social engineering, a tactic in which criminals manipulate users to obtain sensitive information. In this case, scammers convince victims that their funds are in danger and instruct them to transfer their money to a supposedly secure wallet, when in reality it is an account under their control.

Fraud follows a specific pattern:

1. False initial contact

Scammers send text messages or make phone calls pretending to be Binance staff. In these messages, they claim that the victim's account has been compromised and that to avoid losses, they should transfer their cryptocurrencies to a new secure wallet.

2. Delivery of a fraudulent seed phrase

Criminals provide the victim with a seed phrase to set up a new wallet. However, this wallet is already pre-configured by them, allowing them to maintain full control over the funds the victim deposits.

3. Theft of funds

When the victim transfers their cryptocurrencies to the wallet provided by the scammers, they immediately empty the account and disappear without a trace.

Why is this scam so dangerous?

The key to this scam is the use of a fake seed phrase. A seed phrase is a set of 12-24 randomly generated words that allow you to regain access to a wallet. Typically, scammers try to obtain this phrase from the victim, but in this case, they are the ones who provide it so that the person sets up a manipulated wallet without suspecting anything.

Binance has warned that this type of fraud is becoming increasingly common and affects both novice users and people with experience in cryptocurrencies.

How to protect yourself from this scam

To avoid becoming a victim of this type of fraud, Binance recommends following these security measures:

Do not share your seed phrase with anyone, even people claiming to be representatives of an exchange.

Please verify the authenticity of messages using Binance Verify or by contacting official customer support directly.

Only access official platforms , such as the Binance website or their verified apps on official stores.

Be wary of unexpected calls or messages requesting fund transfers or entering seed phrases on new devices.

Keep your contact information up to date to receive security alerts about suspicious activity on your account.

The growth of cryptocurrency scams

How to protect yourself from the new cryptocurrency scam that is on the rise?

Cryptocurrency scams have been on the rise in recent years as the market continues to grow. According to Chainalysis, crypto fraud losses reached $9.9 billion by 2024, and this figure could continue to rise as more fraudulent addresses are detected.

Cybercriminals have also begun using artificial intelligence to create more sophisticated and targeted scams. In addition, frauds have been reported through fake ads on Google Play and phishing attacks designed to look like official communications from legitimate companies.

Recent cases of fraud in the crypto sector

Cryptocurrency scams have affected many people around the world. One notable case was reported by Nick Neuman, CEO of Casa, who managed to contact a scammer pretending to be from Coinbase's technical support.

Cybercriminals use phishing to trick users into giving away sensitive data, allowing them to access accounts with large sums of money. It is estimated that these criminals mainly target victims with net worths of over $50,000.

The best defense is caution

Cryptocurrencies offer many advantages, but they also require caution. The key to avoiding scams is to know their methods and stay informed. Never share your seed phrase or make transfers to suspicious addresses.

If you receive unexpected messages or calls about the security of your account, always verify the authenticity of the information through official channels. Education and prevention are the best tools to protect your funds in the crypto ecosystem.