On August 1, a successful zero-transfer attack resulted in the scammer managing to seize 20 million USDT from Binance. However, Tether quickly blocked the tokens and saved the funds. As it turned out later, the scam had gone unnoticed by a Binance employee. So, let's figure out what actually happened!
What is a zero-transfer scam?
Often, when we send cryptocurrency to the same address, we copy it from the blockchain explorer by reviewing our transaction history and paste it as the recipient's address. In the explorer, these addresses are displayed in a compressed format, showing only the initial and final characters.
This scheme involves scammers generating similar addresses and initiating zero transactions to your address. They hope that the next time you send funds, you might insert the incorrect address and send your cryptocurrency to their wallet.
Learn more about the zero-transfer scam.
An individual transferred 20 million USDT, previously received from Binance, to a deceptively similar address belonging to a fraudster. Notice the striking resemblance between the addresses and their presentation in the screenshot from etherscan block explorer:
Approximately an hour after this transaction, Tether locked the funds in the attacker's account. This fact caught the attention of crypto Twitter influencer ZachXBT:
Tether, the issuer of the USDT stablecoin, has the ability to block tokens at specific addresses. This measure is typically taken at the request of law enforcement agencies to hinder terrorists and criminals from disposing of funds. According to Dune, a total of 918 addresses have been banned to date, involving a sum of 471 million USDT.
Usually, the blocking is preceded by long bureaucratic procedures and resolutions from law enforcement agencies across different countries. However, this case stands out due to the swift and decisive action taken by Tether without the need for these traditional steps.
Later, Binance CEO Changpeng Zhao clarified the situation. He tweeted that this erroneous transfer had been made by an exchange employee, and the timely involvement of Tether helped protect the funds.Currently, the funds remain frozen, and the exchange is in the process of filing a police report to return them.
⚡ Itez encourages you to be careful with crypto scams. Always double-check the recipient’s address before sending any cryptocurrency and ensure its accuracy. Learn how to protect yourself and how to do your own research in our more detailed articles on this subject.