According to blockchain security company Slwomist, someone recently lost 4.35 BTC (approximately $250,000 at its current price) after purchasing a preloaded hardware wallet.
The fake victim woman bought an imtoken hardware wallet from a now-deprecated shop jd.com market.
On July 26, the victim retracted Bitcoin Holdings from OKX Cryptocurrency Exchange in multiple batches to Cold Wallet.
Two days after the transfer took place, the woman discovered that her balance was zero. After examining the wallet’s transfer history, she was shocked to see all the BTC holdings sent to other addresses by malicious actors.
This is yet another case of victims who fell into a preloaded wallet scam that has been around for quite some time. Scammers sell activated wallets that can be accessed after recording seed phrases.
The victim, who was clearly not familiar with the code, set up the compromised wallet without generating a phrase for his own seed.
5 ways to avoid such fraud
Hardware wallet users to avoid being victimized by such fraud You should follow These 5 steps:
- No matter how legitimate offers appear, avoid the market and buy your hardware wallet only from the official branded website.
- Never use the seed phrases that come with your wallet as you are supposed to generate something new yourself.
- Always reset (initialize) the wallet before using it.
- Transfer a small amount of cipher before moving large amounts.
- Educate yourself about how your hardware wallet actually works.
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