Bitcoin Gold Wallet Scam Got worth $3 Million in Illegal Earnings

1832 Total Views

Bitcoin News:

More than $3.3 million has been stolen as a part of the scam that which took the advantage of bitcoin users who were asked to declare their share of newly created cryptocurrency bitcoin gold.

The project, conducted by an administrator of the website Mybtgwallet.com, as seen in the Internet Archive Snapshot, encourages users to submit their private keys or recovery seeds as a means of producing bitcoin gold wallets. After the user did so, however, the cryptocurrency holdings in their wallets were sent to different addresses.

according to self-reported numbers verified by CoinDelite, around $30,000 in Ethereum, $72,000 in Litecoin, $1,07,000 in bitcoin gold and more than $3 million in bitcoin were seized.

Victims blamed the association of the website with the official bitcoin gold project as the source of the succeeded operation.

Mikel Martin, one of the victims,  explained to CoinDelite:

“I reached this site by following the link at [the] bitcoingold.org official website so I trusted it. Yesterday afternoon I noticed both my BTC and BTG stored in that wallet were gone.”

Safety assurances?

Even before the theft became clear, Bitcoin’s golden team – does an effort to create a new version of Bitcoin that which restricts hardware types that can be used for mining, trying to create a new version – promoting mybtgwallet.com on their Twitter account, which guarantees users that it is safe to use in many cases.

They adopted a tool on their website for a while but included a disclaimer that only the window only asked for the wallet address and a disclaimer stated that the users should not share private keys.

The person behind the service, in spite of its slack channel, was admired, in the new BTG community. This website has been developed by a user named John Dass, though it is unclear whether the developer’s actual name or birth name is.

When the robbery became clear, the news got spread quickly.

An analysis of the site’s code has collected site’s recovery keys four days ago by Reddit User Uejji and sent to the site owner. The site claims to be open source, but all source codes have been replaced at GitHub after the scandal began, said Exodus spokeswoman Torsten Sander, a digital wallet user who lost money in the scandal.

Some of the victims of the scandal were using this wallet, which allowed the company to tell how one of their users was working on the scandal.

He said:

“This only happened with bitcoin gold. It’s a very interesting fork … I think it’s extremely unfortunate that new investors, people who know little about crypto, started buying into it, The user gave his recovery seed to the site and his wallet emptied,”

Scam response

Representatives from the bitcoin gold are saying that they will figure out the solution for the situation.

According to spokesperson Edward Iskara, The scam made aware of the scam and launched an internal investigation, The Bitcoin Gold developers said in a published statement, they were “working with the security experts to get to the bottom of this issue”, but did not clarify who the experts are.

Iskara stated, John Dass claimed the innocence during the investigation:

“The investigation increasingly indicated that the original developer, ‘John Dass,’ was responsible for the fraud all along … He has dropped out of touch with us, as well.”

Iskara said, Dass was on the bitcoin gold Slack channel with a “developer” tag, but he wasn’t a part of the project team.

He added:

“There was no formal relationship at all. He did interact with our devs in the Slack regarding developing his open-source code [and] his website, The BTG Twitter account was simply supporting an individual in the community who was supporting BTG – that was their sole intent, at the time.”

He Stated:

“The Bitcoin Gold team will make the further announcement regarding the investigation within next few days.”

 

Pin It on Pinterest