A crypto investor has lost $6.5 million in a scam involving a crypto wallet bought on TikTok.
According to a tweet by blockchain security firm SlowMist on 14 June, the scam involved a cold wallet whose private keys were compromised at creation, making it possible for the sellers to drain the wallet of the funds.
A call for caution
TikTok is one of the fastest-growing social media platforms in the world. Formerly known as Douyin, the platform currently has over 1.5 billion monthly users.
Like any other social platform however, it is also full of scammers and fraudsters. Therefore there is a need for caution, especially for crypto investors.
Although cold wallets are reputed as the most secure, they can also be compromised by stealing the private keys before selling, which leaves the wallet at the mercy of whoever has the keys.
A team member of SlowMist wrote:
“Purchase of cold wallets must be done through official channels! 99% of the so-called “brand new, unopened” and “special sale” cold wallets on the Internet are fake and may have been tampered with! Don’t gamble your entire fortune on a “wallet” that’s a few hundred bucks cheaper — that’s not saving money, it’s throwing your life away!”
When buying a cold wallet, it is advisable to do so directly from the reputable companies that make them such as Ledger, Trezor, etc.
This will ensure that such wallets have not been compromised and the company can easily be held responsible for any loss, unlike the case if such wallets are bought on TikTok or any other platform from unverified sellers.
Also, ensuring best wallet use practices such as securing passwords and private keys after purchasing cold wallets is critical to ensure that crypto assets are secured on the wallet.
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