Fraudsters Steal $3.2 Million Tokens From Bitcoin Gold Wallet- Unkrypted

by Ricky Makan Co-Founder at Unkrypted

A Bitcoin Gold Wallet scam at present managed to net over $3.2 million after taking benefit of bitcoin consumers looking to maintain their BTG tokens. A URL into the deceptive Bitcoin Gold Wallet was, prior to the scam came to light, placed on bitcoin gold site, but was immediately removed once users started realizing their balances were missing.

According to various reports, the site containing the bogus wallet essentially encouraged consumers to upload their confidential keys or retrieval seeds to declare their bitcoin gold, as an archived screenshot of this page reveals.

The end result has been a $3.2 million theft since the scammer supporting the site was able to get at least $107,000 value of bitcoin gold, $72,000 of litecoin, $30,000 of ethereum, and $3 million of bitcoin. As one Reddit user place it, if he went to look at his balance, he discovered that all of his money within an Electrum wallet were gone, just like Bitcoin Gold Wallet site.

“Yesterday I wanted to check my BTG equilibrium on https://mybtgwallet.com/ now I see that all my BTC out of my electrum wallet is now gone! The site is totally gone! I’m honestly a little heartbroken, and needless to say, I understand it’s my fault for handing out my 12-word seed. Did not think that it goes down this way.”

Users trusted the site with their personal keys — even though security specialists advising against it – partially because of bitcoin gold’s support for your wallet, as well as the site’s code being the available source. With their Twitter accounts, bitcoin gold team assured users that the Bitcoin Gold Wallet was secure on multiple events, and even recorded it on its site as a source.

The site’s code on Github was subsequently shifted after the scam was first initiated. An investigation by Reddit consumer Uejji revealed that the site essentially analyzed users’ security seed in Base64 and stored it on the website cookie, that was afterward transmitted to Google. There, the scammer was free to decipher it and utilize it to steal the individual’s funds.

Bitcoin Gold Wallet website was reportedly developed by means of a user named John Dass. A trade links his wallet to that of the scammer’s, meaning he either is the scammer or turned into a victim too. It is, however, uncertain whether this is the person’s real name or simply a pseudonym.

Bitcoin Gold’s Response

Bitcoin gold agents promptly issued a statement on the Bitcoin Gold Wallet scam, when an in-house investigation started, stating that they are trying to find out a way to treat the circumstance. The announcement declared that the team is working with security specialists to find out the reason behind the problem, but does not give details who these professionals are.

The announcement further adds the findings will be revealed to the public the moment it is “right to do so,” and that the staff will collaborate in every possible way to discover exactly what occurred.

Bitcoin gold was somewhat controversial. As covered by CCN, the project website has previously been struck by a DDoS attack following the tricky fork that generated the cryptocurrency, and subsequently started on November 12 to little fanfare. Later on, it was exposed that one of its programmers allegedly added a concealed 0.5% commission to BTG mining pool, sending the capital directly into his pocket.

In its announcement, the group said that it worked with various platforms — such as Google, Facebook, and Twitter — to prevent scammers from accepting people’s capital, but added that their influence is restricted, and encouraged consumers to report scams anytime they view them.

Bitcoin gold team included some guidance for cryptocurrency enthusiast:

“It is worth reminding everyone that it will not be really secure to enter your personal key or mnemonic term to get a pre-existing wallet into any internet site. If you wish to sweep fresh coins out of a pre-fork wallet address, the best practice is exactly the same as following other figurines: send your old coins to a new wallet first, until you expose the private keys of the first wallet. Adhering to this simple rule of personal key management considerably reduces your chance of theft.”