After six days of silence, stolen crypto funds connected to a recent scam that impersonated a $71 million wallet are now on the move.
The incident occurred on May 3 when an investor fell victim to a wallet poisoning scam and sent $71 million worth of Wrapped Bitcoin (WBTC) to a bait wallet address. The scammer had created a wallet address with similar alphanumeric characters and made a small transaction to the victim’s account.
Like many investors, the victim validated the wallet address by matching the first and last few characters and transferred 97% of their assets to it. However, the difference in the middle characters, which are often hidden on platforms for visual appeal, would have been noticeable.
Hackers often convert stolen crypto into Ether (ETH) to make it easier to siphon through privacy protocols like Tornado Cash, and this hacker followed suit. The 1,155 WBTC was immediately converted into approximately 23,000 ETH and remained dormant in the scammer’s wallet for six days.
On May 8, blockchain investigation firm PeckShield observed some of the stolen funds being laundered. The scammer started breaking down the loot into multiple parts and sending it to various crypto wallets.
To reduce traceability, the scammer used around 400 crypto wallets to dilute the stolen funds. Eventually, the funds ended up in over 150 wallets. However, at the time of writing, all the stolen funds can still be traced back to the unknown scammer.
Historically, crypto scammers and hackers have been most active during bull markets. To learn how to safely store cryptocurrencies, read Cointelegraph’s learners’ guide.
There is a new type of scam that allows bad actors to drain users’ wallets without transaction approval. This scam only works on tokens that comply with the ERC-2612 token standard, which enables “gas-less” transfers. However, the user must be tricked into signing a message to enable approval-less transactions. Cointelegraph’s investigation revealed that the scam was orchestrated by a Telegram group featuring a fake version of the Collab.Land Telegram verification system.
For more information on meme coins and their impact on crypto’s ideals, read our magazine article.