Discount cold wallet purchased on Douyin, private key pre-installed with a backdoor.
A Chinese cryptocurrency investor recently purchased a discounted cold wallet through Douyin, only to fall victim to a scam group, losing nearly $7 million in cryptocurrency assets in just a few hours. Blockchain security company SlowMist confirmed the incident on Saturday on the X platform, stating that the wallet's 'private key had been compromised at the time of creation', and the victim's funds were completely emptied within hours.
SlowMist warned that many so-called 'factory-sealed' or 'discount' cold wallets sold on the Douyin e-commerce platform 'Douyin Xiaodian' are often tampered with, and the low prices are merely bait to lure victims.
An X user named Hella, who was a member of the team of Wu Jihan, co-founder of Bitcoin mining equipment manufacturer Bitmain, revealed that the victim was his close friend, and receiving a panicked call from him late at night left him 'chilled'. Hella described this wallet as a 'meticulously designed hot trap', with the stolen cryptocurrency transferred within hours through a money laundering network operated by Huaiwang Group.
Image source: X Hella revealed that the victim was his close friend and described this wallet as a 'meticulously designed hot trap'.
Stolen funds flow to Cambodian money laundering group, with little hope of recovery.
According to Hella, the stolen funds were laundered through Huaiwang Group. This is a Cambodian corporate group that operates an illegal business network including payment service platform Huione Pay PLC, cryptocurrency exchange Huione Crypto, and dark web market Haowang Guarantee.
Although SlowMist successfully tracked the flow of the stolen funds, Hella stated that the chances of 'recovering the funds from the thieves are slim'. SlowMist Chief Information Security Officer 23pds warned on the X platform not to 'gamble your entire fortune for a wallet that costs a few hundred dollars', as this is ultimately not 'saving money, but risking your life'.
Image source: X SlowMist Chief Information Security Officer 23pds posted a warning, saying not to gamble your entire fortune for a wallet that costs a few hundred dollars.
23pds added that these types of scam cases are particularly difficult to prevent, as the equipment is shipped by third parties, and the personnel responsible for shipping or packaging the equipment often do not realize they are participating in a scam group's conspiracy.
Image source: X SlowMist Chief Information Security Officer 23pds stated that the equipment is shipped by third parties, and the personnel responsible for shipping or packaging the equipment often do not realize they are participating in a scam group's conspiracy.
Similar scam techniques are emerging endlessly, experts urge caution in purchasing.
This incident is not an isolated case; similar scam techniques are common in the Chinese market. In May this year, a Chinese printer manufacturer was accused of embedding cryptocurrency theft malware in its official drivers, resulting in the theft of over $953,000 worth of Bitcoin.
Internet security company Kaspersky also revealed in April that it found thousands of counterfeit Android smartphones sold online preloaded with malware specifically designed to steal cryptocurrency.
In the face of increasingly rampant cryptocurrency scam cases, Hella issued a warning: 'When purchasing a cold wallet, it's essential to choose reliable channels. Most of what is online is counterfeit.'
Experts recommend that cryptocurrency users should always purchase hardware wallets from authorized official dealers to avoid being lured by low prices and choosing unknown products.
This $7 million loss case serves as a reminder to investors that, in the cryptocurrency industry, security is far more important than saving costs. The mindset of seeking small savings often leads to massive financial losses, as experts say, 'it's not about saving money, but about risking your life.'
'When Douyin rings, parents raise you for nothing! He bought a cheap cold wallet, and all his NT$200 million assets were stolen' – this article was first published in 'Crypto City'.
