Stolen Crypto Funds from $71 Million Wallet Scam Resume Movement After Dormancy
After six days of lying dormant, stolen cryptocurrency funds tied to a recent $71 million wallet impersonation scam have resumed movement.
On May 3, an investor fell victim to a wallet poisoning scam, sending $71 million worth of Wrapped Bitcoin (WBTC) to a bait wallet address. The perpetrator of the scam had crafted a wallet address with similar alphanumeric characters, executing a small transaction to the victim’s account.
Like many investors, the victim verified the wallet address by comparing the first and last few characters, but failed to notice the discrepancy in the middle characters, often obscured on platforms for aesthetic reasons. Consequently, 97% of their total assets were transferred to the fraudulent address.
In line with common practice, the hacker converted the stolen cryptocurrency into Ether, a move that facilitates siphoning through privacy protocols like Tornado Cash. The 1,155 WBTC was swiftly transformed into approximately 23,000 ETH and remained inactive in the scammer’s wallet for six days.
On May 8, blockchain investigation firm PeckShield detected movement of some of the stolen funds, as the scammer commenced breaking down the loot into smaller portions and dispersing it across multiple crypto wallets. Employing around 400 crypto wallets, the scammer aimed to dilute the stolen funds and minimize traceability. Ultimately, the funds were distributed among over 150 wallets, yet their origin could still be traced back to the unidentified scammer at the time of reporting.
Historically, crypto scammers and hackers tend to be most active during bullish market conditions. For guidance on safeguarding cryptocurrencies, readers are encouraged to consult Cointelegraph’s educational materials on secure storage practices.
A novel scam variant enables malevolent actors to drain users’ wallets without requiring transaction approval. This scam specifically targets tokens compliant with the ERC-2612 token standard, which facilitates “gas-less” transfers or transactions initiated by a wallet lacking ETH.
However, to execute approval-less transactions, users must be deceived into signing a message. Investigations conducted by Cointelegraph have revealed that the scam was orchestrated by a Telegram group featuring a counterfeit version of the Collab.Land Telegram verification system.
FAQs
What is a wallet scam?
A wallet scam is a type of cryptocurrency scam where fraudsters trick victims into giving them their private keys or seed phrases. Once the scammer has access to a victim’s wallet, they can steal all of the cryptocurrency in it.
How can I protect myself from wallet scams?
There are a number of things you can do to protect yourself from wallet scams:
Never enter your private keys or seed phrase on any website or app, no matter how legitimate it looks.
Be careful about clicking on links in emails or text messages, even if they appear to be from a legitimate source.
Only download cryptocurrency wallets from official websites.
Do your research before investing in any cryptocurrency.
Use a strong password for your wallet and store it in a safe place.
Consider using a hardware wallet to store your cryptocurrency.
What should I do if I have been a victim of a wallet scam?
If you have been a victim of a wallet scam, you should take the following steps:
Report the scam to the police.
Contact the cryptocurrency exchange or wallet provider where your wallet was held.
See if you can recover your cryptocurrency.
It is important to note that there is no guarantee that you will be able to recover your cryptocurrency if you have been a victim of a wallet scam. However, taking the steps above will give you the best chance of getting your money back.
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