Crypto Scammers Lure Victims into Multi-Signature Wallet Trap

Crypto users are being targeted by scammers on YouTube’s comments section, who share seed phrases to trick victims into trying to steal funds from a multi-signature wallet.

The Scam

The scam involves sharing seed phrases and asking for help transferring funds from a wallet, which experts quickly flag as suspicious. In a recent incident, a comment appeared under a finance YouTube video, where a user shared their seed phrase and asked for assistance. Cybersecurity firm Kaspersky revealed the scam in a blog post on December 23.

According to Kaspersky, the comment appeared to be from a beginner, with similar comments following from newly created accounts. These messages contained seed phrases and requests for assistance with fund transfers. However, sharing seed phrases openly can lead to theft, as it provides unauthorized access to a cryptocurrency wallet.

How the Scam Works

In this scam, a thief accessing the wallet would find it filled with Tether’s USDT. However, to withdraw the funds, the thief would need TRON TRX. The catch lies in the wallet’s multi-signature setup, which requires approval from multiple parties to authorize transactions.

As a result, even if the scammer pays the necessary fees, they would not be able to steal the funds. Instead, the tokens they transferred would immediately end up in a completely different, third wallet.

Expert Warning

Binance founder Changpeng Zhao warned against receiving crypto through a private key or hardware wallet, citing “several instances” where this has occurred.

Receiving crypto through a private key or hardware wallet is a bad idea. The giver still has access to those crypto. You should move the crypto to an address you own. Or better, just ask the giver to send it to…

Tips to Stay Safe

  • Never share your seed phrase openly, as it can lead to theft and unauthorized access to your cryptocurrency wallet.
  • Be cautious of similar schemes and avoid transferring funds to unknown wallets.
  • Use multi-signature wallets with caution, as they require approval from multiple parties to authorize transactions.
  • Always verify the authenticity of comments and messages, especially those from newly created accounts.

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