On August 2nd, Binance CEO Changpeng “CZ” Zhao shared a close call with a crypto scam that could have cost the exchange $20 million. CZ warned users about the latest scam technique, which involves generating addresses with the same starting and ending letters to deceive unsuspecting victims. This clever tactic preys on users who typically check the beginning and ending letters of an address before making a transaction.
The scammers take advantage of wallets that hide the middle part of the address, making the user interface look cleaner. They then use their newly generated address, which shares the same starting and ending letters as the legitimate target wallet, to send “dust” to the victim’s wallet. Dust refers to tiny fractions of digital assets left over in empty wallets.
Even experienced crypto operators can fall victim to this scam. Users may accidentally select the scam wallet instead of the legitimate one, especially since it appears in the transaction history with the same beginning and ending letters. Fortunately, in this particular incident, the operator noticed the error immediately after the transaction and was able to request the freezing of the funds in time.
CZ emphasized the importance of a fast reaction in these types of situations. To reclaim the funds, a process involving filing a police report has been implemented. While this may not guarantee the recovery of the funds, it ensures that the scammers won’t be able to withdraw them.
Some individuals who responded to CZ’s tweet shared their own experiences of falling victim to similar scams. Others took the opportunity to inquire about Binance’s support for Ethereum Name Service (ENS), which would eliminate the risk of fake crypto addresses.
In the midst of this scam incident, Binance’s native token, BNB, has experienced a 3% drop, currently trading at $240. However, this decline is not directly related to the scam but rather reflects the broader market retreat in the crypto industry.
BNB has remained relatively stagnant since its significant drop in mid-June following the SEC lawsuit. The token has lost 22% since then and is currently down 65% from its all-time high.
Scammers are becoming increasingly sophisticated, and it is crucial for users to remain vigilant and double-check every detail before making any transactions. By sharing this close call, CZ hopes to raise awareness and prevent others from falling victim to similar scams in the future.