How the Seed Phrase Scam Works
Scammers post comments on cryptocurrency-related videos, posing as inexperienced users in need of help. They share their wallet password or “seed phrase” in the comments, implying they have no idea what it means. This ruse tricks others into exploiting the seed phrase “provided” in hopes of gaining access to wallet funds.
But the reality is much more sinister. These wallets are programmed with bots that automatically dump the funds sent to them. Once someone sends cryptocurrencies like Bitcoin (BTC) to cover network fees or transaction attempts, the bot instantly transfers the funds to another wallet controlled by the scammer.
Cryptodemy illustrates this scam in action, showing how small amounts of cryptocurrency, like $10 or $20, quickly turn into large sums. The fraudster uses multiple wallets to launder the stolen funds, complicating the tracing process and avoiding detection.
How to stay safe and protect your funds
The cryptodemic emphasizes a golden rule in cryptocurrencies: Never share your seed phrase with anyone, under any circumstances. Your seed phrase is the key to your wallet, and revealing it gives attackers complete control over your funds.
The video also highlights the importance of being vigilant in online cryptocurrency communities. Scammers often use psychological tricks, such as pretending to be naive users or creating a false sense of urgency. Be wary of unsolicited advice or offers that sound too good to be true.
For cryptocurrency beginners, Criptodemy offers educational resources including security courses and tools to help users understand the blockchain ecosystem and protect their assets.