A seed phrase (also known as a recovery phrase, mnemonic phrase or backup phrase) consists of 12, 18 or 24 words and is used to restore access to a cryptocurrency wallet. It is the basis for accessing the private keys that are linked to the cryptocurrencies stored in the wallet. If access to the wallet is lost – for example due to a defective device or a forgotten password – the wallet can be restored on another device using the seed phrase.
This seed phrase represents the ultimate backup copy, which is why it should always be stored offline and in a safe place. Anyone who has access to the seed phrase can take control of the cryptocurrencies stored in the wallet.
Recently, I’ve noticed more and more comments appearing on my YouTube channel and my social media profiles on Twitter (X), Facebook, LinkedIn and Instagram, supposedly seeking advice on crypto transactions. The seed phrase is often posted publicly. A typical example is: “Thank you for your valuable information! Could you please help me? I have a SafePal wallet with USDT and I have the seed phrase: monkey travel garden drift sunset mirror bring defense grape castle hollow music. How can I transfer the coins to Binance?”
It is clear that this is not a naive crypto beginner, but an attempt at fraud. What is particularly perfidious is that the actual victims themselves become accomplices by being tricked into transferring funds in order to supposedly access the cryptocurrencies in the wallet. This crypto trap is known as a multisig scam. You can find the basics on this topic here: What is a multisig wallet?
In this case, the transmitted seed phrase is controlled by a third party. I deal with this extremely interesting topic, both technologically and psychologically, in my latest podcast from Millers-Kryptowoche.
Markus Miller (1973) is the founder of the Spanish media and consulting company GEOPOLITICAL.BIZ S.L.U. based on the Balearic island of Mallorca, the operator of the information and communication platforms GEOPOLITICAL.BIZ and KRYPTO-X.BIZ. As managing partner, he coordinates an international information and communication network of tax consultants, lawyers, business and financial experts.
In the ZDF program “Aktenzeichen XY Betrug Spezial”, Markus Miller was called in as an expert on a film case.