Bitcoin Gold Wallet Scam Whisks Away $3 Million in Users' Funds

Bitcoin Gold Wallet Scam Whisks Away $3 Million in Users’ Funds

It’s happened again, folks. Another scam in the multi-millions has hit the world of cryptocurrency, and we’ve got the latest scoop. This time, our attention turns to a wallet scam targeting the newly-created bitcoin gold (BTG), where things haven’t been going as smooth as its followers wanted. 

Also read: Ben Lawsky, Man Who Gave Us the ‘BitLicense’, Joins Ripple Board

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Will Cryptocurrencies Catch a Break?

BTG Bitcoin GoldThe news probably won’t come as a shock to long-time cryptocurrency fans. Digital currency exchange Poloniex previously announced its refusal to endorse or hold BTG for users granted its “early” status.

According to the exchange, the software behind bitcoin gold raised certain security questions, and those in charge weren’t comfortable offering their support just yet.

Eventually, bitcoin gold enabled replay protection to ensure users felt safe, but the damage was already done. BTG has been viewed with suspicion amongst cryptocoin users, and miners have begun to show their distrust.

A Lot of Money… Gone

Now, a wallet scam has robbed users of several coins; among them were ethereum, litecoin, bitcoin and, of course, bitcoin gold. Overall, the theft is believed to have exceeded a total of $3 million USD in value.

The robbery allegedly took place through a site called mybtgwallet.com, where users were persuaded to submit their private keys and create bitcoin gold wallets for themselves. Initially, these private keys allowed the scammer access to users’ funds, which were taken and delivered to unknown addresses where they likely remain. An investigation is now currently underway.

One Reddit user described the occurrence:

So, to summarize, every time someone entered their mnemonic seed into mybtgwallet.com, their mnemonic was Base64 encoded, stored on the website cookie, and then transmitted to Google, where the scammer was free to decode it and have full access to that person’s private keys derived from that seed.

Unfortunately, This Is Nothing New

Tether tethers logoThis is all occurring in the aftermath of the recent Tether hack, which saw over $30 million in funds suddenly whisked away. The money was taken from the platform’s treasury wallet just a few days ago on November 19th, and sent to an unauthorized account.

The company is now on a mission to find out what happened and recover the tokens quickly. It’s also offering users access to Omni Core software, hoping to stop the transfer and/or movement of any stolen coins.

The company explained:

Accordingly, any exchanges, wallets, and other Tether integrators should install this software immediately to prevent loss… A thorough investigation on the cause of the attack is being undertaken to prevent similar actions in the future.

Despite these snafus, bitcoin is continuing to show signs of progress, though northward hikes have seemingly slowed down in the last few days. The price currently hovers at around $8200 following a $300 jump to $8100 within a 24-hour period.

Do you think occurrences like those with Tether and bitcoin gold will hurt the reputations of cryptocurrencies? Post your comments below.


Images via Tether, TheFreeStaters.com, Pixabay

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