Category: Scams

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Crypto News Crypto Wallets Cryptocurrencies Scams

MetaMask Wallet Hacked for $10k by Deceptive Discord Member

Dallas2626 posted a sad but not uncommon story on Reddit this week about how he lost US$10,000 from his MetaMask wallet from a scammer in Discord using the fake WalletConnect app.

Rule#1 in crypto: Never ever give out your private key or seed phrase or enter it to connect to a website or App that you don’t recognise.

Rule #2 in crypto: If someone messages you directly offering to “help” you, be warned – they are more than likely a scammer.

Rule #3 in crypto: Always double- and triple-check that the website (or app) you are on is legitimate by cross-checking the URL (or any addresses you are importing) and compare it to the project’s official channels – website, Medium, Twitter, or Telegram.

If you need a #4: Don’t trade crypto on your phone!

For poor Dallas2626 it is too late, but sharing his story will hopefully help others dodge a bullet next time a scammer strikes.

I got my wallet hacked last night and it was my fault… PSA from CryptoCurrency

Here’s a common scenario: you’re a crypto noob who invests in a project that you don’t fully understand. Looking for help, you go to the official group chat on Discord or Telegram to ask some questions. You might post something like: “Hey, can anyone please help me, I am new at this, how can I unstake my XYZ Tokens so they appear back in my MetaMask wallet?” A scammer who is trawling through these group chats all day every day, looking for victims, sees the perfect opportunity ripe for the taking.

The scammer sends you a message, which appears to be legit because they have even gone to the trouble of adding Admin or Help Desk to their name, details that help your brain overlook the first red-flag warning sign – they have direct-messaged you first.

Because you are so focused on fixing your problem, you thank them for helping you and let them lead you step-by-step down the path where you send them all your crypto. This usually involves you visiting some URL link they have sent you and/or entering your seed phrase or private key into a dodgy app or website that looks similar to the real thing (often with the same logos and graphic design, etc) except it’s not the official project, it’s a scam. It’s over so fast that before you realise what’s happened your wallet is empty and your crypto is gone.

Screenshot posted on Reddit: Dallas2626 and The Scammer

Do Not Give Anyone Your Private Keys

Scammers like the one who ensnared Dallas2026 often use the fake WalletConnect app. WalletConnect scams are everywhere. There is even a fake app in the Google Play store using the real WalletConnect logo. Some scam sites even have big red warnings, as the real WalletConnect site does.

WalletConnect Scam Warning

WalletConnect does not have a support team, so anyone contacting you purporting to be from WalletConnect is by definition a scammer. If you need to report a scammer site, WalletConnect has a Report Phishing Page where you can report a scam site URL to be blacklisted.

Watch the Crypto Wallet Scams – Fake WalletConnect Scam video below to further educate yourself.

If you have been scammed, you can try contacting Reclaim Crypto from the official WalletConnect website. With all the scams around WalletConnect though, honestly it could be better to just use MetaMask, which is quite a popular choice for crypto. Stay safe crypto kids!

For more on other types of crypto attacks, Crypto News Australia recently reported on “The Dusting Attack”.

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Crypto News Cryptocurrencies Ethereum Scams

USB Stick With Ethereum Worth $9.5 Million Seized by UK Police

A bold scam has been foiled with the arrest of two shysters who ran a dodgy website and managed to con millions of dollars from victims around the world before trying to run off with the money in classic rug-pull style.

Thanks to the Economic Crime Unit of the Greater Manchester Police in the UK, a 23-year-old man and a 25-year-old woman were tracked down and arrested for fraud and money laundering. Police also confiscated a USB stick containing US$9.5 million worth of Ethereum. A few days later policed located a cryptograph safety deposit box and the code to access it, confiscating a further $12.7 million. In total, $22.25 million was seized from the scammers.

Some Victims Lost Their Life Savings

The scam fooled investors to believe that they were depositing their money into an online saving and trading service using Binance Smart Chain. The criminals targeted people from the UK, US, Europe, China, Australia and Hong Kong. After collecting a small fortune, which included the life savings of some victims, the scammers swiftly shut down the website and transferred the money to their own accounts. Police are now attempting to contact victims and return the stolen funds.

Scams are ever-present in the crypto landscape and opportunistic criminals are rife. Buyers beware: always do your homework when investing online and make sure to minimise the risk of being scammed by only investing in projects that are safe and reputable. For more, read the Crypto News Australia guide on how to avoid crypto scams.

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Australia Bitcoin Scams

Scam Alert: Aussies Beware of Fake Crypto Trading Websites

As the number of crypto scams continues to grow, Australians should be wary when entering certain fake crypto trading websites.

Beware of Fake Crypto Trading Platforms

Scamwatch, run by the Australian Competition and Consumer Commission (ACCC), recently issued warnings on how scammers are targeting Aussies to rip them off using fake platforms.

Not only are scammers designing highly detailed websites posing as crypto exchanges, they are also targeting Aussies on apps including Telegram and other channels to lure investors by offering trading tips and then sending them to fake platforms:

How To Spot These Scams and Avoid Them

There are many types of Bitcoin scams going on. The most common are fake exchanges and wallets, blackmail scams and impersonation giveaway scams.

First of all, a legitimate crypto exchange or broker will never reach out to your Telegram, Gmail or any other channel to offer you trading tips or whatever strategy they come up with. Scammers are persistent, so expect them to make several calls or send emails offering investment advice or trading tips. Another red flag is ads for sites or seminars with “risk-free” investments, or the classic how to “get rich quick” invitation.

For more information, read our guide about common bitcoin scams and how to protect yourself from making a bad decision and losing your capital.

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Crypto News Gaming Scams

Fake Ronin Wallets Drain Users’ Funds

A number of fake Ronin wallets have been spotted circulating on the Google and Apple app stores. The fake wallets trick users into giving up account information, then drain the funds or collectibles held within.

The uptick in Ronin wallet scams parallels the increase of fake wallets across mobile platforms. According to the legitimate Axie Infinity (ASX) page, the company has only released extensions for browsers and has “no Ronin Mobile Wallet at the moment”.

According to Axie Infinity, the wallet is “your boarding pass to a new digital nation” by allowing an extension that lets users play Axie Infinity (ASX) and other decentralised applications running on Ronin, an Ethereum sidechain built specifically for blockchain games.

Various reddit users and members of the Axie community have cautioned against the fake wallets and fake Ronin/Metamask support circulating on the web and among dedicated Telegram and Discord groups.

Another fake Ronin wallet showed up in the App store. Please go and report it to help save people. 🙏🏼 from AxieInfinity

Some users have taken to Twitter, asking developers to implement more safety and compliance measures to keep users’ Axies safe.

Scams have been a problem in the crypto space and come in various forms. Even the well-known hardware wallet company Ledger has suffered from scams where people selling fake Ledgers could get access to the funds.

Axie a Leader in NFT Gaming

Valued at just under US$5 in June of this year, the AXS token is currently trading in the US$35 to US$45 range, putting the project’s native NFT platform above OpenSea and Dapper Labs’ NBA Top Shot, which have been dominating the market for most of 2021.

With over 250,000 active daily players, much of the success of Axie Infinity is attributed to its community of players who collect, battle and trade digital creatures. Its revenue is earned by charging a fee when players buy and sell Axie NFTs in its marketplace, and by collecting fees for creating and breeding axies.

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Crypto Hardware Wallets DeFi Hackers Scams

Trojan Hits Australia’s Android Crypto Wallets

There’s a new malware spreading across Europe and Australia – a virus targeting Android devices to harvest login credentials for online banking apps and crypto wallets in an automated way.

Vultur Wings Its Way to Australia

Vultur, a Remote Access Trojan (RAT) that was being tested in Italy and Spain, is now rapidly spreading across Australia. The virus has been installed over 5000 times via Google Play Store disguised as an app called “Protection Guard”, so the number of victims should be the same.

Source: Twitter

A RAT malware is smuggled into a device to control it remotely, relying on the function of Virtual Network Computing (VNC). Through VNC, hackers try to obtain personal information to carry out online fraud on a massive scale.

For the first time we are seeing an Android banking trojan that has screen recording and keylogging as the main strategy to harvest login credentials in an automated and scalable way.

ThreatFabric researchers

Detecting Vulture

Outside of recently downloading any apps with the name of “Protection Guard”, ThreatFabric suggested that there was a way to detect the RAT:

You can also detect Vulture because when it’s transmitting data to its command-and-control server, the active “casting” icon will show up in the Android notifications. If you’re not casting something and the icon shows up anyway, that’s reason to worry.

ThreatFabric

To reduce the risk posed by RATs such as Vulture, Android users would be advised to ensure that they have a reputable antivirus app running in the background to detect any potential threats when new apps are downloaded.

Buy a Hardware Wallet

The attackers are targeting major crypto exchanges and mobile wallets including Kraken, Coinbase, Binance, CEX, eToro and more. While Android devices are the main target, users believe the virus may soon reach iOS.

Crypto users are warning others on social media, recommending they do not store their funds on exchanges and, if possible, get a hardware wallet and save most of their funds on it.

Scams, Hacks and Glitches on the Rise

As hacks and crypto scams become more common, newcomers should be wary when choosing their wallets. Rather than leave their funds in a crypto exchange, they should store them in a hardware wallet.

Roll, for instance, was a decentralised finance protocol attacked in March by a group of hackers that drained its wallet of over US$5.7 million. To this day, developers still don’t know how the platform got hacked.

As always, you can keep up to date with the many and varied scams out there by consulting Crypto News‘ comprehensive guide.

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Bitcoin Crypto News Scams

Melbourne Film Festival to Show $234 Million Bitcoin Scammer Documentary

You can’t take it with you – or can you? When Canadian crypto scammer Gerald Cotten died from complications of Crohn’s disease in 2018, he took with him a fortune of up to $A234 million in bitcoin and other digital currencies.

The 30-year-old’s sudden death came as a shock in crypto circles but many believe he faked it in an elaborate “exit scam”. Buried with Cotten were the keys to the digital vault containing investors’ cash unwittingly sunk into his trading platform Quadriga CX.

Cotten’s death was kept secret for a month by the firm before it was finally announced – and it was only then discovered he had spent millions in investors’ money to fund his own exorbitant lifestyle.

Documentary “Dead Man Switch” Asks Whether Cotten Died For Real

What exactly happened to Cotten, and whether he is still alive somewhere sitting on a mountain of stolen crypto, is the subject of a new documentary, Dead Man’s Switch, to be screened at the Melbourne Film Festival in August (see trailer below).

The mystery of Cotten and Quadriga is also the topic of two podcasts, Exit Scam and A Death In Cryptoland.

There is widespread speculation Cotten’s death was staged and there have been calls for the exhumation of his body to prove conclusively that he actually died.

Cotten with Jennifer Robertson on their honeymoon in India. Source: en.wikialpha.org

His will was signed just two weeks before he and wife Jennifer Robertson travelled to India on their honeymoon. Cotten had appointed Robertson executor of his estate, bequeathing a $A9.7 million real estate empire, his yacht and his Cessna plane. He even left his two dogs an inheritance of $A108,000.

Robertson has not been accused of any wrongdoing and has denied any prior knowledge of her husband’s business dealings. In fact, in 2019 she returned $A9.7 million to Cotten’s company to repay users.

There’s only two people who really know what happened in India.

Sheona McDonald, director, Dead Man’s Switch

Cotten’s Long Line of Ponzi Schemes

Police believe Quadriga CX was another in a long line of Ponzi schemes where Cotten would use fake accounts to “buy” his customers bitcoin. He would then use the crypto to make personal investments on other digital exchanges, according to accounting firm Ernst & Young.

Quadriga CX founder Gerald Cotten. Source: davidgerard.co.uk

The irony is that Cotton, as an early crypto believer, would have got rich without the need to scam others. He is believed to have made $A125 million in crypto from his own accounts and put them into high-risk financial bets – many of which crashed, costing him more money than Quadriga ever actually made.

Bankruptcy trustees have recovered $A37 million from Quadriga and another $A13 million in assets from Cotten’s estate, but the rest remains under digital lock and key.

Just this week, Crypto News broke the story of how Australian crypto influencer Alex Saunders went to ground after investors alleged they’d been scammed into funding his claimed stablecoin project.

Forewarned is forearmed: Crypto News is also your trusted source for information on all the latest scams going around in the space in 2021.

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Australia Bitcoin Crypto News Ethereum Scams

Influential Aussie Crypto Personality Remains Silent on Alleged Scam

A Twitter storm has erupted with Australian cryptocurrency influencer Alex Saunders at its centre, other investors alleging they’ve been “scammed” to help fund a possibly fictitious stablecoin project.

After leveraging the funds, believed to run to “eight figures”, with American derivatives exchange FTX, Saunders is said to have “lost the lot”.

“It’s clear a lot of people have been scammed,” tweeted victim Ben Armstrong, aka @Bitboy_Crypto. “I’ve been holding this back but now I think it’s necessary for people to know the truth.”

Alex asked me for a 5 bitcoin [BTC] loan back in early March [the BTC price reached its peak for that month at $9,160.39 on March 7]. I gave it to him as a friend. Big mistake.

Ben Armstrong, aka Bitboy_Crypto

Another Twitter user, Richard Heart (@R.Heart), recounted a similar tale of woe, his involving 50 bitcoin (worth approximately A$2.5 million). “Alex begged me for a 50 BTC loan,” Heart tweeted, “then tried to sell me a ‘pre-allocation’ in a token. Then tried to sell me on just giving him money to talk.”

Recently, they were doing a live stream discussing Heart’s crypto project, called HEX, and Heart cut Saunders off the call abruptly after the latter claimed to have “exposed $HEX as a fraud“.

“This Is Now Over Eight Figures of Fraud”

Saunders, who has been curiously silent on social media for some weeks despite his previously high public profile, is the founder and CEO of crypto media channel Nugget’s News. He describes himself in his Twitter profile as “a post-GFC investor in Bitcoin and Ethereum”, and claims to have been involved in “crypto, finance and economics education since 2012”.

On July 23, Twitter user @DeFi_Ted voiced what some of Saunders’ alleged victims were thinking:

Another Twitter user, JP (@JP_Technology), in a slightly more tongue-in-cheek tweet, suggested Saunders’ disappearance from the public sphere might be just the “tip of the iceberg”, hinting at a broader industry-wide issue.

Crypto News has tried to make contact with Saunders to get his comments, but he has thus far remained silent.

Ironically, Saunders has in the past been quick to blow the whistle on other scams affecting the crypto community. He reportedly lost thousands of dollars to a fake Uniswap mobile application hosted on the Google Play store last November.

And earlier this year, Saunders called Gold Coast-based retail-targeted cryptocurrency Qoin “a massive scam” and urged people to “get their money out before it collapses”. Qoin’s membership of Blockchain Australia was terminated amid the claims.

After a reported A$26 million lost in Australia crypto scams in 2020 alone, the crypto community is urged to stay vigilant and be aware of the current crypto scams going around.

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Coinbase Crypto News Scams

Family Loses $75,000 in Crypto via Coinbase SIM Card Swap Scam

A US family of four has had their crypto savings drained through a fraudulent SIM-swap. Their Coinbase account holding US$75,000 was emptied in a matter of seconds, leaving them with almost nothing.

GoFundMe page of Florida family who were victims of a SIM-swap scam. Source: GoFundMe

Identity Fraud Facilitates SIM-Swap Scam

The family, who requested anonymity, said that the stolen crypto investments were intended for their two children’s university fund. “John” and “Lisa” were the victims of a SIM swap/hijack that allowed attackers to fake their identity and move the funds.

In a report filed with the Palm Bay Police in Florida, John wrote: “I know I had over $70,000. My wife checked with our family T-Mobile plan and the company confirmed someone swapped my SIM card at approximately 3:48pm [on May 9].”

Coinbase investigators said the account “was accessed from a Windows 10 device and the [given] IP address by entering your password, a two-step verification SMS code sent to your verified mobile number, and completing the new device confirmation requirement via email”. Coinbase has also recently warned users of fake SMS confirmation scams. Below is an example from last year:

Coinbase is insured, but because the thieves in this case were able to access the account using the proper smartphone security protocol, the lost money will not be reissued. The Florida couple has set up a GoFundMe account in a last effort to recoup their lost savings.

The Imperative to Protect Personal Identifiable Information

John’s SIM was “hijacked” by thieves who were able to match his SIM card to a new device after somehow getting hold of his credentials and enacting the SIM-swap via the log-in process.

Special agent Caroline O’Brien of Palm Bay Police warned that through social engineering or by using social media to obtain personal information that is displayed publicly, thieves can convince service providers they are the actual account holder.

Cybercriminals are monitoring social media to target crypto accounts because the funds are irreversible and nearly untraceable. In Australia, some of the latest crypto scams to look out for are listed here. In 2020 alone, an estimated A$26 million in bitcoin was lost to scams.

Using Two Authentication Methods Beats an SMS Code Login Alone

Individuals who bank, trade, or make credit card purchases with their smartphones could also be affected by this exploit. Consumers should ask their phone carrier for additional security measures, including:

  • a 16-digit PIN
  • voice print authentication
  • facial authentication
  • two-factor authentication in which a code is sent to you, and you send the code back from your smartphone

These measures can help individuals by placing more obstacles between their accounts and potential attackers.

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Crypto News DeFi Scams

Bondly Token Crashes 90% in Potential DeFi Rug Pull

Bondly Finance, a decentralised NFT platform, has suffered an alleged exploit from an unknown attacker.

The project claims that an “unknown party” minted 373 million $BONDLY tokens and sold them in the trading pools, causing a price drop of 90 percent in the following hours.

While the Bondly Finance team claims they were hacked and highlighted it on Twitter and Telegram, some in the crypto community are not fully convinced.

PeckShield, a blockchain security and data analytics company, said that only the owner could perform the minting, which suggests that developers were behind the attack.

According to Xuxian Jiang, founder of PeckShield, the owner pulled the trigger in transferring out 373 million tokens to sell through various exchanges. The attacker’s address used several decentralised exchanges to move the funds, which were worth about US$7.5 million at press time. 

Yet Another Exit Scam

Scams, exploitations and rug pulls (properly called exit scams) are becoming increasingly common in the DeFi space.

As Crypto News Australia reported in March, TurtleDex – a so-called DeFi storage platform – rug-pulled its investors by draining US$2.5 million in Binance Coin (BNB) from trading pools in the Binance Smart Chain (BSC). This exit scam, along with the Meerkat Finance example in the same month, caused a lot of controversy in the DeFi community, prompting other scammers to follow suit.

Earlier this month, the WhaleFarm token dropped almost 100 percent after developers drained liquidity pools filled with several coins, stealing over US$2.3 million.

Traders should be cautious when investing in a DeFi protocol and look for several red flags, such as exaggerated yield returns, a whitepaper that looks more like marketing instead of offering a solution to a problem, and anonymous developers.

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Crypto News Scams

YouTuber Logan Paul Slammed for Promoting Shitcoin to 23 Million Followers

Popular YouTuber Logan Paul finds himself at the centre of the latest pump and dump scandal after Dink Doink, a meme coin he has been promoting, crashed 95 percent in two weeks.

Dink Doink was created less than a month ago and is based entirely on a South Park-themed cartoon that stars Paul and a character by the name of Dink Doink.

The Inevitable Crash

Dink Doink plunged from an all time high of $0.00000000027627 per coin on June 28 (just after the tweet above) down to $0.00000000001320 per coin at the time of writing, a drop of about 95 percent.

Dink Doink chart. Source: Poocoin.app

Logic v Profit

Anybody with more than two brain cells could tell that Dink Doink was a blatant scam, but greed is a powerful thing. As with most pump and dumps, high-risk investors see an opportunity to make a lot of money very quickly. The problem is that a lot of people have to get burned in order for them to succeed.

Some in the crypto community slammed Logan Paul online and tried to warn the masses about this scam, to no avail.

Logan Paul: Promoter and Co-Creator of Dink Doink?

According to YouTuber Coffeezilla, who was one of the first to publicly criticise Logan Paul about the scam, Paul is not only responsible for promoting the scam coin to his millions of followers, he also helped create it.

We might as well be honest about how this came about. I was chilling with Logan and we were like, what’s the most stupidest [sic] name we can think of for a coin? Dink Doink … and it just came alive. Logan designed the character on his phone, on Snapchat.

Dink Doink CEO (podcast audio on Coffeezilla’s video)

Not a Scam, Just a Funny Meme Coin

Paul continues to promote Dink Doink, despite the coin’s huge crash in value and the criticism he and the Dink Doink team have received over the alleged scam.

Furthermore, the self-appointed CEO of Dink Doink uploaded a video to Twitter addressing the public about the recent price action. He asserts that Dink Doink is not a scam, but a funny meme coin. He also claims that neither Paul nor the dev team have sold any of their coins.

Crypto Scams Galore!

No wonder some people are so hesitant to invest in crypto. It seems like there is a new scam every week. Just recently, a number of eSports influencers from FaZe Clan, with over 5 million followers, came under fire for a pump and dump scam called Save the Kids. It seems it’s probably a bad idea to take investment advice from YouTube influencers or celebrities – who would have thought?