Last updated on August 8, 2023
Changpeng “CZ” Zhao, the CEO of Binance, recently shared a close encounter with a clever scam attempt that could have resulted in a loss of $20 million. CZ emphasized the importance of being cautious and aware of the new tactics being employed by scammers in the crypto world.
The scam involved scammers generating wallet addresses that had the same starting and ending letters, a detail that most people check when making a transfer. Some wallets even hide the middle part of the address to enhance the user interface, which plays into the scammer’s advantage.
The scammers would send “dust,” which refers to small fractions of digital assets, to the victim’s wallet using the newly generated address. The scam wallet would then appear in the transaction history with the same beginning and ending letters as the legitimate target wallet, making it easy for users to mistakenly select the scam wallet for a legitimate transaction.
Fortunately, the experienced operator who fell victim to the scam noticed the error immediately after the transaction and managed to freeze the funds in time. CZ highlighted the importance of a fast reaction in these situations and mentioned that there is a process, including filing a police report, to reclaim the funds.
However, some Twitter users responded to CZ’s post, revealing that they had lost funds to similar scams. Others inquired about Binance’s support for Ethereum Name Service (ENS), which could eliminate the problem of fake crypto addresses.
In terms of market activity, Binance’s native token, BNB, experienced a 3% drop in value, trading at $240 at the time of writing. This decline should not be attributed to the scam incident, as the broader crypto markets are undergoing a retreat.
BNB has been relatively stagnant since suffering a significant decline in mid-June following a lawsuit filed by the SEC. Since then, the token has lost 22% and remains 65% below its all-time high.
In conclusion, CZ’s experience serves as a reminder for crypto users to stay vigilant against evolving scam tactics. Detecting and reacting to scams quickly is crucial in preventing financial losses, and the crypto community must continue to find ways to strengthen the security measures against such incidents.
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