Binance CEO Changpeng "CZ" Zhao has alerted the crypto community about a new scam that is becoming increasingly popular.
CZ stated that the perpetrator was prevented from stealing up to $20 million from the leading cryptocurrency exchange. These scammers have developed a new method of falsifying information that is very persuasive to regular customers.
Here’s his tweet from yesterday:
I want to share this (luckily) unsuccessful, but very clever and close scam incident from yesterday
— CZ. Saved $20m. Hope it may also save you one day.
The scammers are so good now they generate addresses with the same starting and ending letters, which is what most people check… https://t.co/DFpdX8aNayBinance (@cz_binance) August 2, 2023
What Is a Dust Attack?
In simple words, a dust attack is a type of cryptocurrency scam where the scammer sends a very small amount of cryptocurrency, called "dust," to a victim's wallet address. This address is generated with the same starting and ending characters as the victim's original wallet address, and may even appear in the victim's transaction history.
If the victim copies and pastes an address from one of the dust transactions, the funds will be sent to the scammer.
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The scammer can generate these addresses by using a technique called "address collision." This technique takes advantage of the fact that cryptocurrency addresses are not unique. Instead, they are generated using a mathematical algorithm that produces a large number of possible addresses.
By using a computer program, the scammer can generate a large number of addresses that are similar to the victim's original address.
There are a few things you can do to protect yourself from this scam:
- Don't copy and paste addresses from applications to transfer funds. Instead, type the address manually.
- Check your address fully, most people just check first and last number and proceed with transactions.
- Use strong, unique passwords for your crypto accounts and enable two-factor authentication.
- Consider using a blockchain domain, such as the Ethereum Name Service. This will make it easier to identify your wallet address and avoid sending funds to the wrong address.
If this had happened to a crypto exchange other than Binance, this scam may have been successful. Binance support was very fast and they halted the transaction before any damage was done.
Also Read: SEC Crypto Bombshell: Richard Heart Sued for Selling Unregistered Crypto
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