Teng reported that users are increasingly receiving fake alerts via phone or SMS that their wallets have been compromised. To 'protect funds', the authors of these messages and calls urgently demanded that potential victims quickly transfer their assets to another wallet, which is actually controlled by fraudsters. Scammers send users their seed phrase via SMS or email, claiming it is intended for a new 'secure wallet'.
A seed phrase or mnemonic phrase is a sequence of 12–24 randomly generated words used to create or restore private keys for a crypto wallet. If the wallet owner forgets (loses) the address or private key, the seed phrase will help restore access to the crypto assets.
Binance's technical support service warned that neither the company itself nor other legally operating crypto services will ever ask users for their seed phrase, let alone send it. If you are asked to install any third-party software or send crypto assets to an unfamiliar address, this is a clear sign of danger, Binance stated.
The type of fraud involving seed phrases is particularly effective because it plays on customers' emotions. Panic and urgency are key 'buttons' — people, fearing the loss of assets, rush to follow instructions without questioning their validity. However, by the time users realize they have been deceived, it is already too late.
Last year, Binance warned about impostors posing as top managers of the platform, offering crypto projects token listings in exchange for payment. Binance advised users not to engage with unverified sources.