Home / News / Crypto / News / Binance Founder CZ Warns About Advanced Crypto Scams After He Was Targeted
News
4 min read

Binance Founder CZ Warns About Advanced Crypto Scams After He Was Targeted

Last Updated August 7, 2023 10:40 AM
Omar Elorfaly
Last Updated August 7, 2023 10:40 AM

Key Takeaways

  • Changpeng Zhao avoids a $20 million scam at the nick of time
  • Checking the first and last characters in a wallet address is not enough anymore
  • Scammers are using bots to mint wallets with specific addresses

On Tuesday, Binance founder Changpeng Zhao tweeted  about a scam he almost fell for. His tweet aimed to warn other users about the elaborate scheme modern crypto scammers plot to steal tokens.

Checking The Wallet Address is Now A Must 

In his Tweet , CZ briefly describes how he almost lost $20 million to a scammer. Apparently, the scammer managed to create a wallet that replicates the first three and last three characters in the address of another wallet that CZ aimed to transact with.  

“The scammers are so good now they generate addresses with the same starting and ending letters, which is what most people check for when doing a crypto transfer. In fact, many wallets hide the middle part of the address with “…” to make the UI look better,” tweeted CZ.

“The scammer then use this address to send you dust transactions so that the address is shown in your wallet. Now, if you want to send to the legitimate address, you might just pick one previous transactions in your wallet and copy the address. You might just copy the wrong one. This is what happened yesterday to a very experienced crypto operator.”

CZ managed to avoid getting his USDT token stolen by the scammer by acting quickly and requesting his tokens to be frozen.

He also says that he will still have to file a police report to reclaim his USDT.

“Fast reaction is key in these types of recovery.”

Crypto In The Bot Era

Considering crypto wallets are often created with random addresses, CZ’s warning baffled many crypto enthusiasts. However, the discussion in the Twitter thread shows that some scammers will utilize bot scripts to generate crypto wallets with specific addresses.

Turns out there’s a whole Github  page that specifically directs users on how to create crypto wallets with certain specifications. 

Bot Attack On Crypto Twitter

A thorough investigation by Network Contagion Research Institute analyzed over three million tweets, focusing on six specific altcoins.

The study states that “Twitter activity played a crucial role in amplifying the value of FTX listed cryptocurrencies: FTX listings were immediately followed by surges sustained Twitter activity.”

“After promotion by FTX, activity for the coins grew increasingly inauthentic overtime: The proportion of inauthentic, bot-like comments steadily grew to approximately 50% of the total chatter.”

While Tesla’s CEO Elon Musk had promised to eliminate bot activity on Twitter before his takeover, his plans have yet to come to fruition. 

“Contrary to assertions that bot activity on Twitter had diminished since his takeover, NCRI’s analysis tells a different story. A considerable presence of bots14 was observed in relation to tweets about $PEPE and $PSYOP.”

Was this Article helpful? Yes No