This scam relies on people not knowing how setup should work. It only takes a moment to learn the rule. This guide is part of our section on crypto threats and scams.
The rule
A recovery phrase should be created once, by your wallet, in front of you. Nobody should ever give one to you.
How the scam works
- A device arrives with a card showing a recovery phrase, or a PIN already set.
- The instructions tell you to "use this phrase", or claim that it is pre-configured for your safety.
- You deposit funds.
- The scammer, who kept a copy, drains the wallet.
They may wait until the balance is worth stealing.
Forms this takes
| Form | How it appears |
|---|---|
| Tampered device | Bought from a marketplace, with a scratch card |
| Gift card or scratch card | Holds a "wallet", with funds |
| Free device by mail | A letter, sometimes after a customer data leak |
| Shop or ATM wallets | Staff "set it up for you" |
| Crypto gift | "Here is a wallet with free coins, here are the words" |
| Online generator | A website that makes your phrase for you |
| Romance or investment scam | A "friend" sets up a wallet for you |
The shared-wallet trick
A variation posts a seed phrase publicly, with a message like "Can someone help me move these funds?" The wallet has a balance, but sending funds out needs gas, which you add yourself. A bot then takes it. Never use a phrase that you found online. It is a trap, and taking funds from someone else's wallet would not be right anyway.
How to check that your setup is genuine
- Buy from the maker or an authorized seller.
- Check that the device has no PIN or phrase in place.
- Make sure the phrase appears on the device's own screen during setup.
- Follow our first-day checklist.
What real recovery cards look like
Hardware wallets often come with blank cards for you to write on. That is fine. A card with words already written on it is not.
If it has happened to you
Move your funds immediately. Follow what to do in the next hour. Then report it to the seller's platform and the maker.