Crypto Fraud Alert: WBTC (Wrapped Bitcoin) Scammer Moves $71 Million in Latest Deceptive Scheme

• The individual associated with a recent $71 million wallet phishing attack has finally begun transferring the funds to new addresses.
• The scammer’s wallet remained inactive for the last six days after converting the stolen 1,155 WBTC into around 23,000 ETH.
• On May 8, blockchain investigation firm PeckShield observed suspicious activity involving the stolen funds.

A recent $71 million crypto scam sees the perpetrator beginning to transfer funds to new addresses, following a six-day period of inactivity. The stolen WBTC was converted into approximately 23,000 ETH.

Scammer Transfers Stolen Crypto

The bad actor stole Wrapped Bitcoin (WBTC) on May 3 after creating a wallet address closely resembling the victim’s in an “address poisoning” scam. The address featured similar alphanumeric characters and executed a small transaction to the victim’s account. Typically, like many investors, the victim validated the authenticity of the wallet address by confirming the matching first and last few characters, a common practice. However, the discrepancy in the middle characters, often obscured on platforms to enhance visual aesthetics, went unnoticed.

Breaking Down and Dispersing Looted Assets

On May 8, blockchain investigation firm PeckShield observed suspicious activity involving the stolen funds. The scammer initiated a process of breaking down the looted assets into smaller portions and dispersing them across numerous crypto wallets. This tactic was directed towards diluting the stolen funds and obscuring their traceability. Approximately 400 crypto wallets were utilized by the scammer to distribute the funds across over 150 wallets. Despite the extensive effort to obfuscate the origin of the stolen funds, PeckShield’s investigation revealed that all the diverted assets can still be traced back to the unidentified scammer as of the current moment.

Crypto Scams Declined in April

The FBI’s 2023 Internet crime report highlighted a concerning rise in cryptocurrency-related scams, resulting in investors losing $3.94 billion last year. This represents over three-quarters of total losses from investment scams during the period. Meanwhile, April saw a major decrease in crypto losses from hacks and scams. Crypto losses from hacks and scams hit a record low for the month, with only $25.7 million lost, marking the lowest figure since 2021. The report attributes the 141% decline in losses primarily due to the absence of private key compromises. There were 11 attacks targeting protocols via private key compromises in March, whereas April witnessed only three such incidents.

Conclusion

Despite the recent decline in crypto scams, the $71 million wallet phishing attack serves as a stark reminder of the potential risks involved in cryptocurrency transactions. Investors are urged to exercise caution and thoroughly verify wallet addresses before initiating transactions. As the investigation continues, it remains to be seen whether the scammer will be identified and the stolen funds recovered.