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Binance CEO Raises Alarm About New Crypto Scam, Saving $20M

Binance’s Tweet Cautioning Against Trading Based on Emotions

Binance CEO CZ warns of a $20 million scam attempt using deceptive addresses, emphasizing the need for vigilance in cryptocurrency transactions.

Highlighting Points

  • Binance CEO CZ warns of a $20 million scam attempt utilizing deceptive addresses with the same starting and ending letters.
  • Scammers send ‘dust’ to their generated addresses to trick victims into making transactions to the scam wallet.
  • CZ advises victims to follow a recovery process, including filing a police report to freeze funds and prevent scammers’ access.
  • Binance’s native token BNB experiences a 3% drop but remains relatively stagnant after a significant drop due to the SEC lawsuit incident.

 

In a recent incident, Changpeng “CZ” Zhao, the CEO of Binance, shared details of a sophisticated scam attempt that aimed to steal $20 million. Fortunately, the attempt was unsuccessful, and CZ took the opportunity to warn others about this clever scamming technique.

The Generation of Deceptive Addresses

The scammers behind this incident utilized a technique that involved generating addresses with the same starting and ending letters, which is the part most people check when making a transfer. This manipulation preys on human error and can easily deceive individuals who rely on checking the address format.

CZ highlighted that some wallets even hide the middle part of the address in order to provide a cleaner user interface. This unintentionally aids scammers by making it even harder for victims to spot the deception.

The Scam Process

In this particular scam, the scammers sent ‘dust,’ which refers to a small amount of digital assets left in empty wallets, to their newly generated address that had the same beginning and ending as the target wallet. Consequently, victims mistakenly selected the scam wallet when attempting to make a legitimate transaction since it appeared in their transaction history.

CZ pointed out that even experienced crypto operators can fall prey to this scam due to the simplicity of copying the wrong address.

A Happy Ending and Recovery Process

Fortunately, in this case, the operator detected the error immediately after the transaction and promptly requested the freezing of the USDT funds involved. However, CZ mentioned that victims can still reclaim their funds by following a process that includes filing a police report. While the funds may not be recovered quickly, preventing scammers from accessing them is a crucial step.

Responding to CZ’s tweet, some users reported having fallen victim to similar scams, while others asked about Binance’s support for Ethereum Name Service (ENS). Implementing ENS would eliminate the issue with fake crypto addresses, providing increased security for users.

Conclusion

Regarding Binance’s native token, BNB, it experienced a 3% drop, trading at $240 at the time of writing. However, this decline is part of a broader market retracement rather than being scam-related. BNB has remained relatively stagnant since the SEC lawsuit incident in mid-June, during which it experienced a significant drop of 22%. Overall, it is currently down 65% from its all-time high.

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