Crypto has revolutionized the way we transfer and store value. Unfortunately, bad actors have also taken a liking to this innovative technology and have found a loophole to trick unsuspecting digital asset holders. Twenty million dollars of USDT was reportedly taken from a wallet due to a zero transfer scam.
Peckshield, a blockchain security company, tweeted the anomalous activity in their account. It was also noted that Tether, the issuer of the stablecoin USDT, has already blacklisted the scammer’s address.
How does Crypto Zero Transfer Scam Happen?
Savvy crypto investors often advise to double-check the recipient address before sending any asset. However, many people skip this step and check the first or last few characters to save time. For example, Ethereum (ETH) addresses are usually composed of 42 characters and some may find it too cumbersome to check them one by one.
The Zero transfer scammers exploit this habit by using a fraudulent address that mimics the first and last few characters of a target wallet. This can deceive a victim into believing that they have transacted with the attacker’s wallet before.
Why is it called zero transfer? There is a loophole that allows attackers to send a transaction using the victim’s wallet, as long as the value is zero, hence the name zero transfer. So the next time the victim tries to send funds to a previous contact, he or she might be tempted to just click on a previous transaction and use the address being displayed. This happens without the victim realizing that the funds are being sent to a completely different address.
Let us examine the $20 million attack raised by Peckshield;
We can see that the middle parts differ, while the beginning and of the addresses are similar.
How Can You Avoid Being a Victim of Crypto Zero Transfer Scam?
Criminals and scammers will always try to find a way to steal, but there are a few steps we can take to avoid being victims.
• Review the transactions in your wallet. Be on the lookout for zero-value transactions or even token transactions that you don’t own. The goal of these transactions is to insert themselves into your history. The scammers are hoping that you will copy their wallets when trying to send funds in the future.
• Do not skip the part of checking the correctness of the recipient address. A minute of your time might save you a big headache.
• When in doubt, try to check with experts or with the support team of your wallet provider.
Vigilance is Key
Crypto is made to be more secure than holding on to fiat, but criminals will always find a way to steal your funds. The blockchain itself is secure and hard to tamper with, but the weak link will always be us. Spend some time trying to study how to avoid scams and how to beef up your digital security. Always be vigilant and remember that a couple of minutes of triple-checking your transaction might save you thousands if not millions of dollars.
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