There is a new addition to the crypto wallet scam: the Ledger scam. Fake hardware wallets are being used to steal crypto and personal information from unsuspecting crypto users. Increasingly, crypto wallets are being used for phishing, one of the most popular techniques cybercriminals use today. This article will cover what you need to know about crypto wallet scams and how you can protect yourself from them.
The Ledger scam
The Ledger scam has surfaced ever since Ledger, the company behind the popular cryptocurrency hardware wallets, was hacked in July 2020. In last year’s data breach, about a million customer email addresses were said to have been compromised, including 272,000 names, mailing addresses, and phone numbers. As a result of the data exposed, crypto wallet scams started popping up.
The scammers were sending out fake Ledger wallets to people to steal their private keys and steal their bitcoins. This crypto wallet scam was intricate and fairly advanced in its execution. The scammers sent people under the compromised addresses fake Ledger Nanos, a popular hardware crypto wallet that is designed to securely store your cryptocurrency offline and away from hackers.
The fake Ledger Nanos were packaged in a realistic box. Pictures on the internet show the fake Ledger devices shrink-wrapped in the packaging. Attached was a letter, presumably written and signed by the Ledger CEO, that apologizes for the data breach and explains the new device is necessary for users to keep their cryptocurrency securely stored. Along with the fabricated apology letter came an instruction on how to activate the new device. The user should connect it to his computer and put in his 24-word seed phrase to initialize the wallet. That is the moment when the scammers pounce because all cryptocurrency on the wallet can be accessed with the seed phrase.
Of course, none of these instructions or the devices sent were legitimate. Ledger quickly came out with a public statement warning its customers not to fall victim to the scam and adding that Ledger would never send unsolicited devices to its customers or ask them for the seed phrase. Pictures of the tampered devices on the internet show how they’re different.
How to avoid a crypto wallet scam
There were a couple of evident signs that gave away why the Ledger scam was a scam. The packaging was broken and had clearly been tampered with, as could be seen in pictures. The supposed letter from the CEO was riddled with typos and poor English grammar. The fake devices were clearly different once you looked at them more closely. The fake instructions asked for the seed phrase, which no legitimate company does.
To avoid this or the next crypto wallet scam, these are a few red lights that you can keep in mind. Cryptocurrencies should always be stored in a hardware wallet like the Ledger Nano or a hot wallet with the seed phrase safely backed up and put away from prying eyes. Even legitimate crypto trading platforms can be an option, as long as they have a reputation for being legit.