Blind signing is the practice of signing a smart contract without fully understanding its contents. It’s one of the most common tools for cryptocurrency scammers, and if you lose your crypto due to blind signing, you don’t have much recourse.
If you’re new to crypto, you should never enable blind signing, period. There are some situations in which blind signing is necessary, since crypto wallets have certain limitations when displaying blockchain smart contracts.
But if you’re holding crypto as an investment, many popular strategies like staking or using decentralized exchanges require you to mess around with smart contracts, including smart contracts that you haven’t read.
Below, we’ll explain the basics of cryptocurrency blind signing and provide some additional tips for staying safe. If you’ve lost access to your crypto due to a lost password, damaged physical storage media, or for another reason, we’re here to help. Call 1-800-237-4200 or submit a ticket online to speak with an expert.
When is blind signing necessary, anyway?
The obvious question you’re probably asking: Why would anyone approve a transaction without reading it?
Usually it isn’t a choice. A hardware wallet shows you the details of a transaction (the recipient, the amount, the fee) before you approve it, but only when it knows how to decode that transaction. Many smart contract interactions, such as some DeFi swaps or NFT marketplace actions, send data the wallet can’t translate into plain language. In those cases the wallet can only show a hash, a long string of characters, and asks you to approve it anyway. That’s blind signing. Wallets keep it switched off by default, and newer firmware and “clear signing” support are making it necessary less often.
One note on terms: “blind signatures” in cryptography research are something different. That’s a privacy technique for digital cash and voting systems, where an authority signs a message without seeing its contents. Wallet blind signing has nothing to do with privacy. It just means you’re approving something you can’t read.
That’s exactly why scammers like it. They send a malicious contract through a fake NFT marketplace, a DeFi protocol promising high returns, or a phishing site, and they count on you not being able to see what it does.
The victim believes that by enabling blind signing, they’ll receive something in return:
- A free NFT.
- A token swap.
- Claiming an airdrop.
Scammers may also mimic the interface of well-known crypto websites (such as OpenSea or Coinbase), so the victim will believe that they’re working with a trustworthy company.
But once they’ve enabled blind signing and agreed to the contract, their crypto is transferred to the scammer, and there’s not much that can be done in those situations.
Related: Bitcoin Seed Phrase Recovery
To stay safe, treat your cryptocurrency like real currency.
Something strange happens when people invest in Bitcoin, Ether, and other cryptocurrencies: They stop thinking of their investment as real money.
You’d exercise extreme caution if a site asked for your credit card details; you should apply that same approach if a site asks for any sort of access to your crypto.
We strongly recommend using hardware wallets (with appropriate backup) wherever possible. A hardware wallet keeps your keys offline, and its trusted display can often show you the true details of a transaction, allowing you to spot a discrepancy between a website and a malicious contract.
Other tips for avoiding crypto scams:
- Verify Every Interaction. Before connecting your wallet, double-check the website’s URL to ensure it’s legitimate. Scammers create convincing fakes of popular platforms to trick you into signing malicious transactions.
- Use a ‘Burner’ Wallet. For interacting with new or untrusted applications, use a separate wallet with a small amount of funds. This protects your main holdings if you accidentally approve a malicious contract.
- Be Skeptical of “Too Good to Be True” Offers. Free mints, surprise airdrops, and high-yield promises are classic tactics to create urgency and lure you into signing a transaction without thinking.
- Regularly Revoke Permissions. Use tools like Etherscan’s approval checker to review which smart contracts have permission to access your funds. Revoke any permissions for platforms you no longer use or don’t recognize.
While vigilance is your best defense against scams, other issues can still prevent you from accessing your assets. If you’ve lost access to your crypto due to a lost password, damaged physical storage media, or for another reason, the experts at Datarecovery.com are here to help. Call 1-800-237-4200 or submit a ticket online to speak with an expert.