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Mnemonic Phishing Scam

Customer Specialist Team
Updated

Private keys represent sole ownership of crypto assets, meaning that anyone, who gets hold of your private keys, can take control over your assets.

To make it easier to memorize and write down the private keys, the developers put in place the BIP-39 standard, and convert your private key into a set of mnemonic phrases with 12-24 English words. As another form of private keys, mnemonic phrases are just as important. Therefore, please back up your mnemonic phrases properly and keep them ONLY to yourself. Otherwise, any asset loss incurred cannot be recovered.

 

In the crypto world, scammers usually phish for account credentials such as private keys or mnemonic phrases. But some others do exactly the opposite, taking advantage of the victims' knowledge of private keys (mnemonic phrases) and their greed for "pie in the sky". By "disclosing" their own mnemonic phrases, the scammers set a phishing trap and lure victims into sending cryptos to their wallets. Here is one of the common mnemonic scam patterns:

 

1. The scammers send messages to crypto users on social media and give out the mnemonic phrases of their blockchain addresses, claiming that they need help to manage their assets, e.g. trading USDT (TRC20) tokens for fiat.

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2. After importing the wallet provided by the scammers, the victims indeed find USDT (TRC20) in the given account. Since USDT-TRC20 is a TRON token, it is required to use its native crypto TRX to pay the miner fees for transferring the funds.

However, only a few TRX left in the wallet is not enough to cover the transaction. At this point, some victims, tempted by greed, will deposit TRX into the scammer's wallet in order to complete the transaction.

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3. If the scammers have enabled account balance monitoring, they can detect the new TRX deposits within a short time and then transfer them out immediately. Without sufficient TRX balance, the victims still cannot transfer the USDT (TRC20) tokens (As shown in the second screenshot, no USDT transfer was made). This is how the scammers keep cheating victims of their TRX deposits.

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Security tips:

  1. Ensure to back up your mnemonic phrases properly and keep them safe, otherwise, any asset loss incurred cannot be recovered.
  2. Be wary of strangers who offer rewards or ask for help.

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