Scammer robs 1400 Bitcoins worth $16 million with a bitcoin wallet exploit

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BTC scammer steals 1,400 BTCs worth $16 million from a Bitcoin investor by offering him to update his Electrum wallet

How would feel losing a whopping $16,000,000 with just a click of a button? This happened to a Bitcoin investor who wanted to check his old bitcoin wallet balance. When he opened the wallet, he was given an option to upgrade his wallet to the latest version. The bitcoin investor clicked the button and zoom! All his 1400 bitcoins lying in his wallet just vanished. Imagine losing your 1400 bitcoins worth $16,000,000 in under a minute.

Many cryptocurrency exchange platforms offer different cryptocurrency wallets that have a builtin security mechanism to prevent the above fraud. But unfortunately, the bitcoin investor had an old Electrum-based wallet which has been known to be exposed to such frauds.

The investor, who was holding his $1400 bitcoins in his cryptocurrency wallet lost his money after he opted to download a long-exploited version of the Electrum wallet.”I had 1,400 BTC in a wallet that I had not accessed since 2017,” explained the Bitcoin holder. “I foolishly installed the old version of the Electrum wallet. My coins propagated. I attempted to transfer about 1 BTC however was unable to proceed. A pop-up displayed stating I was required to update my security prior to being able to transfer funds,” he added.

Electrum developer Thomas Voegtlin confirmed that the scammer used an old Electrum phishing exploit which has been around since late 2018. “The warning that has been on display on our website for the last 18 months,” said Voegtlin. “The user was scammed because he used old software, susceptible to phishing,” he added.

The scammers have exploited a version of the exploit which was discovered by Malwarebytes investigation in 2019. Scammers exploit faulty Electrum software and add malicious nodes to the servers. These nodes are controlled by them. Once the user clicks on this malicious link, he/she is prompted to install a bogus security update, which automatically downloads a malware-infested wallet. From there, hackers remotely control the wallet and send the contents to a separate address.

The investor who chose to remain anonymous must be ruing the decision to update his Electrum wallet.

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