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MultiSig-SCAM! Crypto Fraud Tactic
Here is a brief explanation of this crypto scam. A seed phrase, also known as a recovery phrase, mnemonic phrase or backup phrase, consists of 12, 18 or 24 words. It is used to restore access to a cryptocurrency wallet. Anyone who has the seed phrase can access the private keys that are linked to the stored cryptocurrencies. If the wallet is lost, whether due to a defective device or a forgotten password, it can be restored on another device using the seed phrase.
This seed phrase is the most important backup copy. It should therefore be kept offline and in a safe place. If it falls into the wrong hands, a stranger can take control of the wallet, leading to Crypto Fraud and financial loss.
Crypto Fraud on Social media
Recently, I have noticed an increasing number of suspicious comments on my YouTube channel and my social media profiles. On Twitter (X), Facebook, LinkedIn and Instagram in particular, posts are popping up again and again, supposedly seeking help with crypto transactions. They often share their own seed phrase publicly. A typical example reads:
“Thank you for your valuable information! Could you please help me? I have a SafePal wallet with USDT and my seed phrase is: monkey travel garden drift sunset mirror bring defense grape castle hollow music. How can I transfer the coins to Binance?”
MultiSig Scams: A Sophisticated Crypto Fraud Method
It quickly becomes clear that this is not an inexperienced crypto user, but an attempted Crypto Fraud. What is particularly perfidious is that unsuspecting people are being lured into a trap. They are asked to transfer money in order to supposedly gain access to the wallet. This procedure is known as a multisig scam. You can find the basics in my article: What is a multisig wallet?
In such cases, a third party controls the transmitted seed phrase. The combination of technological sophistication and psychological manipulation makes this topic particularly exciting. You can find out more about this in my latest podcast, Miller’s Crypto Week.
Expert Insights on Crypto Fraud
Markus Miller (1973) is the founder of the Spanish media and consulting company GEOPOLITICAL.BIZ S.L.U. based in Mallorca. He operates the information and communication platforms GEOPOLITICAL.BIZ and KRYPTO-X.BIZ.
As managing partner, he coordinates an international network of tax consultants, lawyers and business and financial experts.
Markus Miller was interviewed as an expert on Crypto Fraud in the ZDF program Aktenzeichen XY Betrug Spezial.
