Crypto scammers set traps with fake seed phrases worth $8K

A new scam has emerged where fraudsters use fake seed phrases to lure thieves into multi-signature wallet traps, according to Kaspersky’s findings.

The scheme begins with scammers posting fake comments under finance-related videos on YouTube.

These comments claim that the user is trying to transfer USDT (CRYPTO:USDT) to another wallet and is asking for help, sharing the seed phrase publicly.

Kaspersky discovered that these comments come from newly created accounts, each sharing the same recovery phrases.

The scammers hope that an opportunistic thief will attempt to access the wallet, which seems to contain funds—around $8,000 in USDT.

However, the scam is set up with a trap.

The wallet is a multi-signature one, which means that it requires several approvals to authorise transactions.

When the thief tries to transfer USDT, they find that the wallet does not have enough TRX (CRYPTO:TRX) to cover the transaction fee.

If the thief attempts to send TRX from their own wallet, the tokens are rerouted to a different wallet.

Kaspersky’s investigation reveals that the scam primarily targets other criminals, tricking them into becoming the victims.

By impersonating inexperienced crypto users, the scammers deceive thieves into attempting to steal funds that they ultimately cannot access.

"So, the scammers are impersonating beginners who foolishly share access to their crypto wallets, tricking equally naive thieves – who end up becoming the victims. In this scenario, the scammers are something like digital Robin Hoods, as the scheme primarily targets other crooked individuals," Kaspersky explained.