User Loses $7 Million through Cryptocurrency Fraud on Douyin with a Falsified Cold Wallet Scheme
Warning: This discussion may involve topics of financial loss, cybercrime, and scams. Reader discretion is strongly advised.
Crypto enthusiasts beware! A heartbreaking incident recently unfolded when a crypto investor lost a staggering $7 million after purchasing a "discounted" cold wallet on Douyin, China's TikTok doppelganger. The cold wallet, lured by its seemingly attractive price, turned out to be a sneaky trap set by crafty scammers.
Infiltrating the crypto community, these scammers compromised the wallet's private key from the get-go, setting the stage for a heist. Within hours, these thieves ransacked the user's funds, leaving them with little more than a hole in their wallet.
Blockchain security experts at SlowMist investigated the case, revealing a chilling pattern. Apparently, "factory sealed" or discounted cold wallets, commonly found on Douyin's e-commerce platform Douyin Shop, are often tampered with to ensnare unwitting victims. Low prices serve as bait, reeling in the unsuspecting.
One X user, Hella, shed light on the situation. Previously associated with Bitmain co-founder Jihan Wu, Hella shared a harrowing account from a friend who called in distress, describing the wallet as a "meticulously designed hot trap." The crypto was later laundered through Huiwang, a shady Cambodian network tied to questionable operations like Huione Pay, Huione Crypto, and the darknet market Haowang Guarantee.
In light of this incident, Hella issued a solemn advice: "When buying a cold wallet, opt for a reliable channel. Most of the ones online are counterfeit." Although SlowMist managed to track the funds, recovery is painfully unlikely.
SlowMist's security chief, 23pds, underscored this sentiment on X: "Don't gamble your entire fortune on a 'wallet' that's a few hundred bucks cheaper - that's not saving money, it's gambling with your life!"
Scams like this are a tricky menace to eradicate. Often, third-party shippers, who remain oblivious to the fraud, deliver pre-loaded malware devices. This scam mirrors other recent cases. Back in May, a Chinese company manufacturing printers was accused of embedding crypto-stealing malware in its software. In April, Kaspersky uncovered thousands of fake Android phones online, equipped with malware designed to plunder crypto and personal information.
Our takeaway? Crypto aficionados should always deal with trustworthy sellers and scrutinize devices to ward off these shrewd swindlers.
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[1] https://www.scr.com/en/news/discounted-cold-wallets-douyin-shop-scams[2] https://www.scr.com/en/news/scamming-tactics-douyin-cold-wallet-market[3] https://www.scr.com/en/news/crypto-theft-tactics-discounted-cold-wallets[4] https://www.scr.com/en/news/safe-buying-guide-cold-wallets-counterfiet-prevention
The heartbreaking incident serves as a reminder to exercise caution when buying cold wallets, even when they appear to be discounted, as such offers may be part of a strategically designed scam like the one on Douyin Shop. Blockchain technology, while promising, can also be exploited by clever scammers to steal crypto funds, leading to financial loss.
