How to avoid becoming a victim of cryptocurrency scammers

Many important and useful functions appear regularly in the field of cryptocurrencies, however, not all of them are used for their intended purpose. In this article, we will look at tricks in various blockchains and wallets that scammers can use to trick you into getting your funds. These methods appeared quite recently, but have already become one of the most popular.

Note that the article is not a call to repeat the actions of scammers, and the information is published in order to save your funds.

“Gift” wallet

Our support team is often contacted by users who are unable to send funds from one address to another. Most often, these are people who, due to their inexperience, bought a wallet with a balance or someone asked to withdraw funds from an existing wallet. Typically, such a wallet has a significant balance in the address like USDT TRC20 or USDT ERC20 tokens, which require a native coin to pay network fees to send. Every time we see more and more new stories about how a user can get such a wallet. The stories are made up on the fly and are not true. Let's consider this case more detailed.

As you know, cryptocurrency balances are located on addresses on the blockchain and are not stored on any particular device. Cryptocurrencies are also moved between addresses on the network, and only the owner of the private key, with which he signs the sending transaction, can have access to the funds. In the case of hierarchically determined wallets, the seed-phrase stores many private keys from different addresses of one asset, or different assets — in the case of multi-currency wallets. The Recovery Phrase is a crypto wallet that allows you to access various cryptocurrencies that are located on addresses in various networks — Bitcoin, Ethereum, Tron and others. According to this principle, the work of the non-custodial crypto wallet Trustee Wallet is arranged.

However, there are crypto wallets that work on the principle of multi-signature, when in order to complete a transaction it needs to be signed with several keys, for example, 2 out of 3 — this is what scammers use.

Such wallets are easily identified by their address, which can be checked in a blockchain explorer. For example, the address shows that it is part of a multi-signature wallet, where the address TLT4YqTFSVyoJeTx7tSjiQXS5LkqnSq1SM has the right to send transactions.

In other words, the Recovery Phrase, which is distributed by scammers on the Internet, has only read rights, and to send funds, you need a key that is in the hands of a scammer.

As you can see, the address has a balance in USDT, which requires the native coin Tron (TRX) to be sent. The scammer's goal is to force the victim to top up the TRX balance, which the scammer will successfully appropriate for himself, since he has the necessary key, while the USDT will remain intact.

By distributing such a wallet on the Internet, the scammer catches people who want to get a freebie. There are similar schemes of how scammers work not only in the Tron network, but in other networks, most often in Ethereum, where users replenish the address in ETH.

Conclusion: Do not accept such dubious gifts and do not try to use such addresses, as this will lead to the loss of your funds.

Always install the application only from official stores (AppStore, Google Play Market) and generate Recovery Phrases yourself, they are unique for each wallet. Only a clean install and a newly generated seed phrase will allow you to securely store and manage your funds.

Spam transactions

This principle of fraud is based on the concept of “cryptodust”. This is a small transaction per address that allows you to track active addresses on the network and follow them in the future in order to get the user's funds.

In the Tron network, sending a small transaction can be paid by a fraudster not at the expense of Tron itself, but at the expense of the Bandwidth that he receives when staking a coin. Thus, the transaction to the fraudster is almost free.

Such transactions are sent to your addresses on the Tron network following a successful incoming transaction.

The purpose of the transaction is to confuse the user or cause them to make a mistake — it is highly likely that when the user sends funds back, he will copy the address from the last incoming transaction to his address. Thus, the funds will not be sent to the address of the recipient, but to the address of the scammer.

Conclusion: Be sure to check the correctness of the recipient's address before sending funds. Do not copy addresses from your address's transaction history. The correct action would be to request the correct address from the recipient, double-check and only then send the funds.

By default, the Trustee Wallet app hides crypto dust transactions in history to reduce the chance of error.

Zero USDT transactions

The principle of such transactions is built on the experience of the previous method, however, it is configured for outgoing transactions. Since the scammer cannot have access to your address and funds (unless, of course, you gave him a seed-phrase), the scammer's smart-contract contacts your address to initiate a phishing transaction. In this case, in the address history, the transaction looks like an outgoing transaction, but with a zero USDT balance. The scammer's goal is to trick you into making the next USDT transaction not to your recipient's address, but to the scammer's smart contract address.

At the same time, very often a scammer's smart contact has a similar address to your recipient. As you can see in the screenshot, the beginning and end of the address are the same, but the middle is different. In this case, it is very easy to confuse the addresses and send the next transaction to the scammer.

Again, such smart contract calls cost the scammer practically free of charge, due to the Energy that can be obtained by staking Tron. Therefore, this scam only works on the Tron network.

Conclusion: Carefully check the recipient's address before sending funds.

Please note that all transactions in cryptocurrencies are irreversible and cannot be reversed, therefore funds will be lost.

We hope that this article can keep you from losses. If you have any questions or suggestions, we will be glad to see you in our Telegram chat!