Close Call: $20M Saved as Binance Boss Warns of Latest Crypto Scam

2023-08-03 05:55:41

On Aug. 2, Changpeng “CZ” Zhao said he wanted to “share this (luckily) unsuccessful, but very clever and close scam incident from yesterday.

It saved $20 million, he said before adding, “hope it may also save you one day.”

Scammers are becoming more sophisticated, and their latest weapon is the generation of addresses with the same starting and ending letters. This is what most people check when making a transfer, CZ said.

I want to share this (luckily) unsuccessful, but very clever and close scam incident from yesterday 👇. Saved $20m. Hope it may also save you one day.

The scammers are so good now they generate addresses with the same starting and ending letters, which is what most people check…

— CZ 🔶 Binance (@cz_binance) August 2, 2023

Crypto Address Scam Highlighted

He added that some wallets hide the middle part of the address to make the UI look better. This plays to the advantage of the scammer.

The scammers use their newly generated address with the same starting and ending letters to send ‘dust’ to the victim’s wallet. Dust is the tiny fraction of a digital asset often left over in empty wallets.

Users make wrongly select this scam wallet to make a legitimate transaction since it now shows in the history and has the same beginning and ending as the legitimate target wallet.

“You might just copy the wrong one. This is what happened yesterday to a very experienced crypto operator,” said CZ.

There was a happy ending to this scam attempt, however, as explained by CZ:

“The operator noticed the error right after the transaction, and we were able to request the USDT to be frozen in time.”

He added that there is now a process that includes filing a police report to reclaim the funds back. “At least, the funds won’t leave with the scammers,” he said before adding, “fast reaction is key in these types of recovery.”

Some respondents to the tweet reported having lost funds to this type of scam. Meanwhile, others asked when Binance would support ENS (Ethereum Name Service), which would eliminate the issue with fake crypto addresses.

BNB Outlook

The Binance native token has dropped 3% on the day to trade at $240 at the time of writing. However, the decline is not scam related, as broader crypto markets are retreating again.

BNB has been pretty flat since it dumped in mid-June following the SEC lawsuit. The asset has lost 22% since then and remains down 65% from its all-time high.

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