If someone says there’s a quick way of making profit through crypto, people get interested. If they say it is through a well-known exchange such as Binance, they may actually gain the attention of many investors. This is exactly what fraudsters are doing with Binance Smart Contract Arbitrage scams.
One of the fraudsters that our reporter investigated actually cloned a Binance site, Binance-smart-contract dot US, that many may mistake for the original Binance site. This is despite the fact that it doesn’t feature all the pages that are found on the exchange. The target of these scams could be inexperienced investors.
Telegram, Hotbed for Crypto Scams
There are many cryptocurrency scams out there. One of the most effective channels used in crypto scams is the messaging app, Telegram. A smart contract scam takes advantage of the limited knowledge of many investors to deceive them into sending funds to the fraudster with promises of high returns.
How Binance Smart Contract Scam Works
The fraudsters created a Telegram channel and a clone of the Binance site. They then added investors to the channel using a bot or manually. What is obvious is that they target people who have shown interest or have been involved in the crypto space.
It’s possible that they buy these Telegram accounts from crypto project teams that have collected subscribers for airdrops, from crypto forums or just randomly with the hope to gain the attention and trust of these people.
The entity behind the scam regularly shills the project on Telegram, giving the members the impression that there is a quick and smart way to make money.
Here is the pinned message on the Binance Smart Contract Arbitrage scam.
💶💶💶The million-dollars profit factory: Crypto Smart Contract Arbitrage💶💶💶
Binance coin(BNB) Arbitrage Tutorial
People are making millions of dollars with cryptocurrency arbitraging, the secret way to make a huge profit without the risk. More people will hedge their bets on currencies that act outside the confines of the dollar and buy other fiat currencies. However, we are also seeing more people invest in cryptocurrencies. At the same time, it leaves a huge profit margin for the market.
Trading cryptocurrencies are high-risk and speculative, but now the Binance exchange launched an arbitrage smart contract for people who using Binance chain wallets, act now!
More details: https://bit.ly/smart_Contract_Wallet
Commentary: There is no evidence that Binance as an exchange, launched the so-called arbitrage smart contract. So this is just an attempt to deceive people who are not savvy on the happenings in the crypro space. What is obvious to all is that there are no quick, guaranteed ways of making money through digital currency investments. Neither is arbitrage guaranteed on any platform to the extent of yielding 10-20% of the investment instantly.
The pinned message continued:
If you have any questions, feel free to consult the admin of our group. Cryptocurrency. Arbitrage is not rocket science, lots of people making millions of dollars by using this strategy, I hope you are the next one! Feel free to consult the admin of our group. @arbitrage_….
In explaining the process, the pinned message states:
1: Register on Binance https://www.binance.com/ or https://www.binance.us/
2: Enter the amount of BTC or ETH you want to purchase.Confirm your order , Enter your billing information.
3: Select “Wallet” – “Fiat and Spot”Click “Withdraw”, and copy paste your Atomic wallet’s BTC or ETH address.Send BTC or ETH to your wallet.
4: Open the Atomic wallet and then Filters→Show all→Hide zero balances→APPlY to complete the addition of BNB. Then send ETH to Binance official smart contract ERC20 ETH
Or send BTC to Binance official smart contract BTC address:
You will receive BNB in about 30 minutes:
5: Send your BNB to Binance exchange, to trade, or sell them.
Crypto Wallet，Please note: It only takes 10-20 minutes for the system to automatically recognize and return BNB to your wallet, where the amount of BNB contains 12-20% of your principal and profit.
https://www.binance.com/ or https://www.binance.us/
Let’s briefly summarize the process of the arbitrage:
[Buy BTC or ETH] → [Send to Atomic Wallet] → [Deposit to smart contract] → [Receive
BNB in Atomic] → [Send BNB to Binance] → [Trade BNB for BTC or ETH] → [Withdraw BTC or
ETH to Atomic] → [One more round of arbitrage]
Shilling The Fake Binance Site
The fraudster(s) regularly post on the group. These posts are claims of how much they have made from Binance through arbitrage. They also highlight that Binance is trustworthy. The essence is just to make the members added to the group to believe that investors are making money though the fake arbitrage.
It is possible that when people actually invest send money to the fake smart contract account, they are removed from the group to prevent others from knowing that this is an elaborate scam. Some of the posts that are shared on Binance Smart Contract group are:
“That’s right. Arbitrage is good now, I don’t want to do other projects”
“Yes, I’m very thankful if I didn’t participate. I can’t imagine!”
“When I joined arbitrage, I also borrowed money and overdrafted credit card”
“I believe in Binance”
Why This is A Scam?
An inexperienced investor may be deceived by the scheme because the fraudster behind it made every effort to conceal their intention to defraud. All the rigmarole they wrote is just to create the impression that the scam is linked to Binance, which is the largest cryptocurrency exchange.
What the fraudster is actually saying in a summary is that the investor should visit Binance, purchase the Binance token (BNB) and send the token to the fraudster’s wallet.
They covered the fact that the wallet they’re using to steal from the user is theirs by renaming it a smart contract address.
The Fake Binance Site
It is obvious that the fraudster wants to give the users that they direct to the fake Binance site the impression that the site is from Binance US.
A Whois search on the domain shows that it was registered on May 27,2022 and updated on June 1, 2022. This few weeks old site bought its domain for one year. What it says about the entity behind it is that it has no long-term plan for the exchange, which by the way is fake.
How To Verify Authentic Binance Site
There are ways to verify that you’re using the authentic Binance website such as here.
Furthermore, it is obvious from the way the fraudsters cloaked their phishing site and used the smart contract on the Bit.ly cloaking service that their intention is to deceive users who are not savvy about how the crypto space works.
Protecting Yourself from Fraudsters On Telegram
Since Telegram has become the hotbed for crypto scams, it is important that the user protects themselves by taking steps that shield them from malicious players.
Some of the steps that are necessary in protecting the user on Telegram are:
Here is a good suggestion from khaled0111, a user on Bitcointalk. According to him,
“The first thing you have to do is to go to your Telegram account’s privacy settings and change Groups & Channels from Everybody to My Contacts. This way you will prevent random people from adding you to such scam groups.”
The important thing is making sure that the only people that can call or add you to a Telegram group are people that know you. However, if you join any Telegram group, be sure that there fraudsters may be able to contact you individually if your privacy settings permit that.
Hiding your phone number is another important step to avoid becoming a victim of the many crypto scams out there. This can also be done under settings where you can select who you want to see your phone number. You can also work on preventing your online status from being seen by others. Then it’s not a bad idea to prevent others from sharing your contact to third parties. With these steps, it is possible to be at least sure that you are added to groups with your consent.
There are authentic ways to make profit via Binance. You can check trading, investing in NFTs are more here.