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Sunday, April 14, 2024

Crypto Wallet Co-Founder Explains How He Fell Victim to a Phishing Attack

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Bill Lou, the CEO and co-founder of Nest Wallet, has shared on X that he had fallen victim to a crypto phishing attack, resulting in the loss of 52 stETH, equivalent to $125,000.

The security-focused crypto wallet app co-founder asked for help with the attack from ZackXBT, a crypto sleuth, and others who could help.

Fake LFG Token Airdrop Scam

The LFG token airdrop, which stands for “less fees and gas,” recently came to light as a reward initiative for Ethereum users who have spent more than $4,269 on transaction fees since 2016. The airdrop aims to onboard these users onto the Solana blockchain.

Unfortunately, one fake website, posing as the official LFG token platform, emerged with the intention of stealing users’ funds, leading to high-profile victims such as Bill Lou, the co-founder of Nest Wallet.

Lou revealed that he had been scammed out of $125,000 worth of stEth while attempting to claim the LFG airdrop. Lou clicked on a link from an article that appeared at the top of a Google search, directing him to the fraudulent website. Lou acknowledged that he used MetaMask instead of Nest Wallet for the claim because he was working on fixing bugs in a test version of Nest.

He emphasized the importance of transaction simulation, noting that while Nest Wallet includes this feature, MetaMask lacks it entirely, suggesting that such an incident could have been avoided with proper simulation.

Lou then advised users always to verify links from official sources and consider using multisig wallets for enhanced security.

Phishing Attacks Have Become Rampant

Lou appears to be one of several victims affected by a phishing attack, with others reporting that their wallets were also drained after clicking on similar fake links through fraudulent X accounts.

In response to these incidents, the LFG project acknowledged the problem and posted a warning about scam accounts impersonating them. They urged users to report such accounts to help protect the community while also providing details of their official X account and website for verification.

The LFG project plans to airdrop a total of 400 billion LFG tokens to 387,000 qualifying wallets, with unclaimed tokens set to be burned after one month. The current value of the LFG token is reported to be $0.000069, according to CoinGecko data. Approximately 25,000 users have claimed LFG tokens on Solana so far.

Phishing scams continue to be a significant issue in the cryptocurrency space. In 2023, over 324,000 crypto users reportedly fell victim to phishing scams, resulting in approximately $295 million in digital assets lost to wallet drainers.

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