A new scam targeting cryptocurrency users has surfaced, in which fraudsters trick victims into stealing funds from multi-signature wallets.
The scam’s tactics, exposed in a December 23 blog post by cybersecurity firm Kaspersky, involve using fake seed phrases to lure users into transferring funds and ultimately scamming them.
The scam begins when fraudsters share their seed phrases under the guise of needing assistance transferring funds from a multi-signature wallet. Often unfamiliar with the risks, victims attempt to “help” but are deceived. The scammer shares their seed phrase, asking for help with fund transfers, but the victims, who often have ulterior motives, end up falling for the trap by sending funds into that wallet, thinking they are trying to execute a scam.
“In this scenario, the scammers are something like digital Robin Hoods, as the scheme primarily targets other crooked individuals,” the firm’s blog post read.
According to the cybersecurity firm, the scam leverages multi-signature wallets, which require approval from multiple parties to authorize transactions, adding an extra layer of security. However, even with this safeguard, the fraudsters are still manipulating others. The firm emphasized that these types of scams are becoming more sophisticated, urging users to never share their seed phrases and to be vigilant when engaging with unknown parties online.
Binance’s founder Changpeng Zhao recently highlighted in an X post that receiving crypto via a private key or hardware wallet is a “bad idea,” referencing “several instances” where this method has led to issues.
Meanwhile, this alert from Kaspersky follows a recent warning from New Zealand’s Financial Markets Authority about another crypto scam involving fake investment tips on platforms like YouTube, leading users to fraudulent investment groups. The regulator cautioned users not to engage with scammers, disclose personal details, or interact with dubious videos. It also encouraged victims to report the scam to YouTube or the appropriate platform and to reach out to their bank or payment provider for prompt assistance.
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