The cryptocurrency community faces another stark warning to exercise caution during the ongoing bull market, as a hardware wallet user reports devastating losses attributed to a phishing attack.
A crypto investor, known as “Anchor Drops” on X (formerly Twitter), disclosed a personal loss of 10 Bitcoin (BTC) on their Ledger Nano S hardware wallet on December 13. The staggering loss, equivalent to approximately $1 million in BTC, was compounded by an additional $1.5 million loss in non-fungible tokens (NFTs) stored in the same wallet.
Phishing Hack Linked to Incident
The cryptocurrency community and hardware wallet manufacturer Ledger have traced the losses back to a phishing attack from years ago that has only recently been exploited. According to Ledger, the malicious transactions occurred long before the incident was detected.
Ledger confirmed the details to Cointelegraph, stating that the user “appears to have fallen victim to phishing and malicious transactions many years ago.” A related analysis from blockchain security expert KDean pinpointed a phishing transaction tied to a compromised Ethereum address shared by Anchor Drops.
The transaction, labeled “Fake_Phishing5443,” occurred on February 22, 2022, and is believed to have played a key role in the losses.
Blockchain Evidence Confirms Malicious Activity
Blockchain security platforms, including Cyvers, validated the phishing transaction as the primary culprit. Hakan Unal, senior scientist at Cyvers, explained to Cointelegraph that blockchain data shows the user unknowingly authorized a phishing transaction nearly three years ago, granting a malicious actor access to the wallet.
“The hacker remained inactive for years before draining the wallet,” Unal said, emphasizing that the breach was not related to Ledger’s systems. He urged users to adopt best practices, including periodically reviewing token approvals, to safeguard their assets.
Bitcoin Loss Raises Questions
While the NFT losses were linked to Ethereum transactions, the attack’s impact on Bitcoin holdings has left experts puzzled. Tony Ke, lead security researcher at Fuzzland, expressed confusion over the mechanism that enabled the theft of BTC, stating:
“For the NFTs, KDean’s comment explains everything. But I don’t understand how the BTC was stolen.”
Both Cyvers and Ledger proposed that if the phishing attack also compromised the user’s recovery phrase, the hacker could have gained access to all blockchain networks supported by the wallet, including Bitcoin.
This incident highlights the enduring risks of phishing scams in the crypto space, even years after the initial breach. Users are strongly advised to remain vigilant, routinely audit token approvals, and safeguard their recovery phrases to ensure the security of their digital assets.
