Mumbai, February 19: The crypto market is full of potential to some, while others face scammers who dupe them into thinking they made a good choice. The scams in the cryptocurrency market have affected several people who lost large sums of money without any hope of recovery. In the crypto market, people can anonymously trade cryptocurrencies and funds with others, which is also a problem as unknown threat actors could target them.

Recently, a new scam called "Share-Seed-Phrase" has emerged. This deceptive tactic manipulates victims into transferring funds into malicious wallets controlled by them. Binance CEO Richard Teng warned cryptocurrency about the new scam, explaining why investors need to be aware of it. What Is Bhashini AI? Know All About Features and Benefits of MeitY’s Translation App, How To Download and Use Mobile App.

What is a Share-Seed-Phrase Crypto Scam? Here's Everything To Know

Binance explained that 'Shared-Seed-Phrase' was a new scam that was sweeping the crypto world and manipulating the victims. The scammers, using this new technique, dupe crypto users into sending funds from safe wallets to their wallets, which they set up in advance. They do this by convincing cryptocurrency investors to think they are professionals in the field. The impersonators then urge the victims to import a new seed phrase to set up a wallet and transfer assets to the target wallet. 

How Does Share-Seed-Phrase Crypto Scam Work?

According to Binance, a seed phrase of a crypto wallet is also known as a "recovery phrase" or "mnemonic phrase'. It contains around 12 to 24 generated words that help the users recover private keys linked to the wallet. The scammers target the seed phase, which helps the crypto investors restore their wallets in case they forget their private keys. Scammers usually ask for the seed phrase to access the victims' funds in their wallets. However, the situation is the opposite with the "Share-Seed-Phrase" scam.

The scammers or criminals give their wallet's seed phrase to their targets, then trick them into transferring digital funds to their controlled wallet. According to Binance, they follow these steps. What Is ‘Fake Number’ or ‘Fake Website’ Scam on Google? How Can You Protect Yourself From Scammers?,

  • Scammers use fake calls or SMS to pose as crypto exchange platforms as a part of "share seed phrase". They tell their targets their account is compromised and they will need to transfer funds into a secure wallet.

  • Scammers send fake wallet seed phrases via email or SMS, saying it will be the victim's new secure wallet.

  • Criminals steal funds from wallets not owned by crypto users once they transfer their digital assets.

(The above story first appeared on LatestLY on Feb 19, 2025 08:01 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).