The information security director at SlowMist stated that it is important not to "risk your entire fortune on a wallet that is a few hundred dollars cheaper."
Reports indicate that a crypto user lost nearly 7 million dollars in cryptocurrencies after purchasing a discounted cold wallet through the Chinese version of TikTok, Douyin, which turned out to be compromised.
The blockchain security company SlowMist claimed in a Saturday post that "the private key was compromised at the time of its creation" and that the user's funds "were exhausted in a matter of hours" from the compromised cold wallet.
Getting a cold wallet at a good price may seem like a good way to save money, but SlowMist stated that cold wallets advertised as "factory sealed" or "discounted" have often been tampered with, and that the reduced price is a way to lure victims. Douyin has an e-commerce feature, the Douyin Store, which allows third-party sellers to offer various products.
Cryptocurrencies "disappeared" in just a few hours.
A user on X named Hella, a former team member who worked with Jihan Wu, co-founder of Bitcoin mining equipment manufacturer Bitmain, said that the victim was a close friend who called him late at night and "gave him chills."
Hella said that the wallet was "a carefully designed trap" and that the stolen cryptocurrencies "vanished through Huiwang in a few hours," according to Google's translation of the Saturday post on X.
Huiwang, also known as Huione Group, is a Cambodian conglomerate operating a network of illegal businesses, including the payment service platform Huione Pay PLC, the cryptocurrency exchange Huione Crypto, and the darknet marketplace Haowang Guarantee.
"When buying a cold wallet, you need to choose a reliable channel. Most of those on the Internet are fake," said Hella.
The stolen funds cannot be recovered.
SlowMist managed to trace the stolen funds, but Hella said there was "little hope of recovering them" from the thieves.
The information security director at SlowMist, under the username 23pds, said in a post translated by Google that this case is an important reminder not to "risk your entire fortune on a wallet that is a few hundred dollars cheaper," because ultimately, it is not "saving money, it is throwing your life overboard."
