Incident Overview
In a distressing incident reported by blockchain security firm SlowMist, a woman lost approximately 4.35 Bitcoin, valued at around $250,000, after falling prey to a fraudulent hardware wallet scheme. The victim purchased an imToken wallet from a defunct seller on the JD.com platform, believing it to be a secure option.
Details of the Fraud
On July 26, she transferred her Bitcoin assets from the OKX cryptocurrency exchange into this new hardware wallet in several transactions. However, just two days later, she discovered her wallet was completely empty. Investigating the transaction history, she was alarmed to find that a hacker had redirected her Bitcoin funds to various other addresses.
Understanding the Scam
This case underscores the persistent threat of preloaded wallet scams, wherein fraudsters sell wallets that they have already activated, retaining access to the original seed phrase. Unfortunately, the victim did not reset the device or create a secure new seed phrase, unwittingly allowing the scammer to maintain control over her assets.
Best Practices for Hardware Wallets
For cryptocurrency enthusiasts looking to secure their holdings, it is crucial to adhere to best practices when setting up hardware wallets. Here are five essential steps to help protect against such scams:
- Always purchase hardware wallets from official retailers.
- Reset the device to factory settings before use.
- Create a new, secure seed phrase.
- Enable additional security features, such as two-factor authentication.
- Regularly monitor your wallet for any unauthorized transactions.
