A recent case of fraud in the cryptocurrency space has drawn attention to the risks associated with purchases through unofficial channels. An investor lost approximately ₹57 crore after acquiring a compromised cold wallet.
Situation of Fund Loss
An unnamed crypto investor transferred their entire portfolio to a compromised cold wallet purchased through Douyin, China's version of TikTok. This incident occurred in mid-June and resulted in significant financial losses.
Role of Huiwang in the Scam
The scam involves the entity Huiwang, known for its illicit activities. This network swiftly processed the stolen funds, emphasizing the need for caution when conducting crypto transactions.
Warnings from Security Experts
Expert Hella, a former member of the Bitmain team, warns about the risks of buying hardware wallets from unreliable sources, particularly on e-commerce platforms like Douyin Shop. He stated, 'The wallet was a carefully designed hot trap, and the stolen crypto was washed away through Huiwang within a few hours.'
This event serves as a warning to cryptocurrency users, highlighting the importance of caution and verifying purchase channels to prevent similar incidents in the future. Experts advocate for heightened vigilance and ongoing education to combat increasingly sophisticated threats.
