Thief Sniffs Out $520,000 in Bitcoin Through Hardware Wallets. Here's How to Shield Yourself in Five Easy Methods
Headline: Caution for Crypto Users: Preloaded Hardware Wallet Scams Highlighted in Recent Incident
A recent incident involving a woman losing approximately $250,000 worth of Bitcoin serves as a stark reminder for crypto users to be vigilant when purchasing preloaded hardware wallets.
The woman, who purchased an imToken hardware wallet from a now-defunct shop, found her Bitcoin holdings missing after a malicious actor sent them to other addresses from her wallet. This incident is another example of the preloaded wallet scam that has been ongoing for some time.
Preloaded wallets, which are devices sold already containing Bitcoin, are a common scam tactic. Scammers sell activated wallets that they have access to, often by recording the seed phrase. To avoid falling victim to such scams, it's essential to take some precautions:
- Avoid buying preloaded wallets altogether. Legitimate hardware wallets are sold empty and secure by design. Preloading wallets with Bitcoin for sale is a common scam tactic where the seller controls the seed phrase and can steal your funds once you use the device.
- Purchase hardware wallets only from official manufacturers or authorized resellers. Avoid third-party marketplaces or suspicious sellers, especially for expensive crypto devices like Ledger or Trezor.
- Upon receiving your hardware wallet, perform a full factory reset and initialize it yourself. This ensures you generate a unique seed phrase that only you know. Do not rely on any pre-existing seed or PIN provided by the seller.
- Verify the device’s authenticity and firmware using official tools from the manufacturer before using it to store crypto. Counterfeit or tampered devices may have backdoors.
- Never share your seed phrase or private keys with anyone. A preloaded device with a known seed phrase means the seller could access your Bitcoin contents at any time.
- Set and protect a PIN code and back up your seed phrase securely according to recommended best practices for cold storage (offline, physical backup).
- Be cautious of malware and phishing attacks. When setting up or connecting your hardware wallet, use a clean, secure computer free from malware that could steal credentials or wallet info.
- Check reviews and community feedback on the seller and product if purchasing from any online marketplace. Avoid deals that appear too good to be true.
In summary, the safest approach is to buy a brand-new hardware wallet through an official or authorized channel, initialize it yourself, never use a device with a preloaded Bitcoin wallet from unauthorized sources, and always secure your seed phrase and PIN. This prevents scammers who preload wallets from stealing your crypto once you use the device.
The victim withdrew her Bitcoin holdings from the OKX cryptocurrency exchange to her cold wallet in multiple batches on July 26. However, two days after the transfer, she found her balance to be zero, underscoring the importance of the precautions outlined above.
It's also worth noting that, as of the provided context, no major alert has been issued by the SHIB team regarding a fake Bitget Web3 email targeting crypto users. Users are advised to be cautious of such phishing attempts and to verify the authenticity of any emails before taking action.
This incident serves as a grim reminder for all crypto users to prioritize security measures when dealing with their digital assets.
[1] Molchan, Yuri. (2022, August 16). Woman Loses $250,000 in Bitcoin After Purchasing Preloaded Hardware Wallet on JD.com. Cointelegraph. https://cointelegraph.com/news/woman-loses-250-000-in-bitcoin-after-purchasing-preloaded-hardware-wallet-on-jd-com
[2] Molchan, Yuri. (2022, August 16). How to Protect Yourself from Preloaded Hardware Wallet Scams. Cointelegraph. https://cointelegraph.com/news/how-to-protect-yourself-from-preloaded-hardware-wallet-scams
[3] Molchan, Yuri. (2022, August 16). Preloaded Hardware Wallet Scams: What You Need to Know. Cointelegraph. https://cointelegraph.com/news/preloaded-hardware-wallet-scams-what-you-need-to-know
[4] Molchan, Yuri. (2022, August 16). SHIB Team Issues No Alert for Fake Bitget Web3 Email Targeting Crypto Users. Cointelegraph. https://cointelegraph.com/news/shib-team-issues-no-alert-for-fake-bitget-web3-email-targeting-crypto-users
- The recent Bitcoin loss incident involving a preloaded hardware wallet highlights the importance of crypto trading through legitimate channels.
- Crypto investors should refrain from purchasing preloaded wallets, as they may be exposed to token trading risks due to potential cybersecurity vulnerabilities.
- Hardware wallet manufacturers, such as Ledger and Trezor, sell empty wallets, encouraging users to generate their own seed phrases for enhanced cybersecurity.
- To prevent crypto mining scams and safeguard investments, users should reinitialize newly purchased hardware wallets instead of relying on preloaded ones.
- It's recommended to implement an Ethereum-based network called Web3 for trading cryptocurrencies to ensure the highest standard of blockchain security and efficacy.
- Financial institutions have started to recognize the potential of blockchain technology in fostering secure and efficient crypto trading platforms.
- As the crypto market grows, so does the necessity for stringent cybersecurity measures, ensuring smooth trading, mining, and token transfers for all users.
