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Crypto Scam Alert: $71M WBTC Spreads Across Wallets

In a tragic turn of events, $71 million worth of Wrapped Bitcoin (WBTC) was transferred to a bait wallet address
May 8, 2024

Crypto theft is a grim reality of the digital finance world, and recent events are a stark reminder. On May 3, a distressing $71 million wallet impersonation scam came to light, shaking the crypto community. 

Here’s what happened: an investor became the victim of a sophisticated wallet poisoning scam. Mistakenly, they transferred $71 million worth of Wrapped Bitcoin (WBTC) to a scammer's bait wallet address.

The scammer's tactics were cunning. They created a wallet address strikingly similar to the victim's, tricking them into sending 97% of their assets. While investors typically verify wallet addresses by checking the first and last few characters, they often miss discrepancies hidden in the middle. 

Had the victim scrutinized the address carefully, they might have spotted the difference.

The perpetrator wasted no time converting the stolen WBTC into approximately 23,000 Ethereum (ETH). This swift move is a common tactic used to obscure the stolen funds' origins through privacy protocols like Tornado Cash. 

For six days, the converted funds laid dormant in the scammer’s wallet. Then, on May 8, blockchain investigation firm PeckShield spotted the stolen funds moving.

The scammer started splitting the loot, distributing it across numerous crypto wallets. They utilized around 400 wallets to obscure their tracks, spreading the stolen funds across more than 150 wallets. 

As of now, the funds are still traceable, but the identity of the scammer remains unknown.

Crypto scams and hacks are rampant, especially during bullish market conditions. Educating investors about secure cryptocurrency storage practices is crucial. For those new to the crypto space, Cointelegraph offers a comprehensive guide on cryptocurrency security.

In another concerning development, a new scam is targeting users of tokens following the ERC-2612 token standard. This scam bypasses transaction approval by deceiving users into signing a message. 

A recent investigation uncovered a Telegram group featuring a counterfeit version of the Collab.Land Telegram verification system, orchestrating this scam.

While April recorded the lowest combined losses from crypto-related hacks and scams since 2021, the threat is ever-present. According to CertiK, the month saw only $25.7 million lost to crypto-related hacks, scams, and exploits.

Flash loan attacks, which have been a significant concern, accounted for $129,000 in losses, with exit scams causing $4.3 million in damages. 

The first quarter of 2024 saw $336 million lost to Web3 hackers and fraud, with January alone accounting for nearly half of the stolen capital. 

Nevertheless, there's a silver lining: $73,885,000 has been recovered from stolen Web3 capital in seven specific cases. 

The battle against crypto theft rages on, and vigilance is paramount in these volatile markets.

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