Binance CEO Changpeng "CZ" Zhao has roiled the crypto community with information about a new type of scam that affects even the most experienced crypto traders.
CZ described a case where such a scammer was stopped one step away from withdrawing $20 million from a leading crypto exchange. The scammers used a new method of forgery that is very convincing to unsuspecting investors.
The scammers take advantage of traders' habit of verifying all wallet addresses before transferring money by matching only the first and last letters of the addresses. The rest of the addresses are hidden and replaced with "..." to make the interface simpler and more convenient.
CZ tweeted that hackers have learned to generate wallet addresses so that the first and last letters match the desired address.
Loading...
Then the scheme is as follows: the fraudster sends you a dust transaction from this address so that the address is displayed in your wallet. And when you decide to send a transfer to a legitimate address, you select one of the previous transactions in your wallet, copying the address. So you simply copied the wrong address.
In the case described, a crypto trader made a $20 million transaction to a fake address but only noticed the error right afterwards. He turned to Binance for help, which saved the situation by freezing the transferred USDT.
It is worth noting that there is no guarantee that the funds will be returned to this crypto trader, but they certainly won't end up with scammers. In order to get their transfer back, the trader will have to provide documentation, including a police report, and wait for due diligence.
Also interestingly, in response to CZ's tweet, a user mentioned that instead of checking one initial and final letter at a time, he double-checks three letters at a time. Zhao explained that this no longer works and that such wallet hacks are becoming more common.
Related news: Binance's monthly transaction volume in China has surpassed $90 billion.
