Multi-signature wallets are an additional security measure that requires multiple private keys to authorize a transaction.
However, scammers also use these wallets to trick users into stealing cryptocurrencies.
Multisig scams are especially common on the Tron network, and often involve tricking users into sending cryptocurrency to cover transaction fees.
What is a multisig wallet?
A multisig wallet is a type of cryptocurrency wallet that requires more than one private key to authorize a transaction.
This adds an extra layer of security, as multiple people must sign the transaction before it is executed.
It is commonly used in businesses, decentralized organizations (DAO), or family funds to ensure that no one can move the funds without the consent of others.
How do multisig scams work?
In a common scam, the scammer deceives the victim into giving partial access to their multisig wallet.
Then, they ask them to send cryptocurrencies to cover transaction fees, but, because the wallet is multisig, the scammer can control total access to the funds and steal them.
A typical example of this scam occurs when a fake recovery phrase is shared in a comment on platforms like YouTube.
The victim, when importing the scammer's wallet, tries to send funds but discovers that they need more TRX to pay the fees.
The scammer takes advantage of this situation to ask you to send more cryptocurrencies, resulting in a loss for the victim.
How to avoid multisig scams?
Keep your private keys and recovery phrases private: Never share this information with anyone. Legitimate wallet providers will never ask for your private keys or recovery phrases.
Stick to official wallet software and applications: Make sure to download apps only from official sources and verify the authenticity of URLs before using them.
Regularly audit your wallet permissions: If you use a multisig wallet, check who has access to it. If you find unauthorized access, remove it immediately.
Use hardware wallets: Hardware wallets, which store cryptocurrencies offline, offer greater security, as even if someone has access to your multisig setup, they will not be able to move the funds without the physical confirmation of the device.
Enable two-factor authentication (2FA): Activate 2FA on your wallet or exchange to add an extra layer of security.
Stay informed: Security in cryptocurrencies is constantly changing. Keep up to date with new scams and best practices to protect yourself.
Check wallet warnings: Some wallet providers display alerts if they detect that you are using a multisig wallet. Pay attention to these warnings to avoid potential risks.
* Multisig wallets are an excellent security tool, but scammers use them to deceive users.
To protect your funds, it is important to keep your private keys secure, audit permissions, and use additional security methods such as hardware wallets and two-factor authentication *
