Share-Seed-Phrase Scam: Binance Warns Crypto Holders

Binance has reported a new scam that manipulates victims into funding malicious crypto wallets. The news comes from Richard Teng, CEO of Binance, who shared it on X (formerly Twitter).

According to the 18 February post, Teng stated that the scammers use manipulative tactics to convince users to transfer funds into wallets they own.

What Does the Scam Consist of?

Binance explained in a post on the blog that the scammers pose as official representatives of the platform and contact victims under the pretext of offering security assistance. They claim that the user's account has been compromised and that specific seed phrases must be imported to recover it.

The victims believe they are protecting their account and transfer the funds to a 'secure wallet'. Once the transaction is complete, the fraudsters empty the account without a trace.

In response to this threat, Binance urged users to remain vigilant and not to interact with individuals posing as company representatives. The exchange also emphasised that it never asks for personal information, particularly seed phrases, and urged users to verify communications through official channels.

An Evolution of Crypto Scams

This scam is just one example of the numerous frauds that plague the cryptocurrency world. In the past, fraudsters tried to directly steal users' seed phrases in order to gain access to their wallets. However, this method is a reverse variant: fraudsters provide users with a seed phrase to induce them to send funds before stealing them outright.

Last year, a similar scam emerged on social media, particularly on YouTube. In that case, scammers posted seed phrases in the comments, pretending to be beginners looking for help. Users attempting to access these wallets found themselves trapped: the wallets contained tokens but lacked the fees needed to transfer them.

These wallets were protected by multi-sig technology, meaning that a single seed phrase was not enough to move funds. As soon as a user transferred the fees to unlock the funds, fraudsters with access to multi-sig would quickly move them.

These examples demonstrate how cyber criminals are refining their techniques as the crypto sector evolves. According to DeFiLlama's data, over $100 million was stolen from investors last year through these scams.

In addition, Spaziocrypto reported that over $3 billion in tokens were stolen in 2024. This shows how crucial it is to remain vigilant and report any suspicious activity in the crypto world immediately.