A Binance blog post is shedding light on how their anti-scam team helped stopped over $130 million from being stolen from their customers.
The report highlights their “2024 Anti-Scam Refund Initiative” which uses the classic Prevention, Detection and Recovery approach most banks fraud programs use. But it’s their novel 24 Hour Safety Net that I find most interesting.
Binance’s Multi-Blockade Approach
Binance calls their approach to scam prevention “gold standard in the crypto industry for risk management, user education, and proactive security measures”. And honestly, it does look pretty good.
It Starts With Proactive Prevention And Personal Interventions
Binance’s program starts with a series of proactive techniques to stop people from becoming victims. First they tout that they lead the industry in working with law enforcement, providing training and investigative assistance.
Then, they engage in targeted warnings to identify users in high risk areas. They say they sent over 15,000 alerts last year and proactively sent out over 2,000 risk assessment each day to customers to stop them from being scammed.
Binance scam effort also includes personal interventions. They will conduct personal interventions with vulnerable users and people that are chronically scammed.
Secondly, They Implemented A Novel 24 Hour Safety Net
Binance says that even though they warn people repeatedly, many still move forward with the scam. When Binance sees suspicious activity, they engage a process called the 24 Hour Safety Net.
They employ a pyrimid approach to cooling off the victim over 24 hours to progressively stop them from losing money.
First, when funds are transferred to accounts they believe are suspicious, the system automatically a hold and then investigates it on multiple fronts.
During this critical window, users can contact Binance at any time and notify them that they have been scammed. If a report is submitted, Binance immediately reviews the case, contacts the suspect recipient, and conducts a detailed investigation.
When the transaction is confirmed to be fraudulent, Binance reviews the case and works on getting the victim a refund.
In 2024 alone, Binance said they processed 30,000 calls with vulnerable users to alert them of the risks of their transactions and dissuade them from withdrawing funds to scammers.
The Last Phase Is A Rapid Recovery Phase
When all else fails, Binance implements a Rapid Recovery process which is quite unique.
They start by using AI to analyze the scam reports that are submitted by users. They call it a “Scam Verdict Model” that can instantly analyze and make an assessment of the scam.
If the scam verdict model identifies a scam, the suspected scammer accounts are frozen within seconds to prevent further losses.
The program appears to have remarkeable success. Binance claims that they blocked over $129 million in funds being lost, and made an additional $9 million in recoveries back to the victims.
Silent Sufferers – What Binance Does
Binance has identified a critical category of scam victims they call “silent sufferers” – individuals who, paralyzed by shame and self-blame, never report their cryptocurrency losses.
Rather than waiting for these victims to come forward, Binance employs a proactive identification system to spot users who have transferred funds to known scammer accounts.
Their customer service team then initiates contact through chat, providing step-by-step guidance through the recovery process. This systematic outreach is part of their policy of equal support for all victims, whether they’ve actively reported their losses or remained silent.
You can read the whole report from Binance right here.
