A cryptocurrency scammer became an unlikely victim in last week's Ledger hardware wallet theft, losing roughly $4.8 million in bitcoin, according to analysis by blockchain firm Chainalysis.
The scammer had obtained 60 bitcoins through a task scam scheme where participants were paid to create fake sales and reviews of real items. Victims were instructed to add their own money to receive payment, only to have their funds stolen.
The mastermind behind the task scam moved the stolen proceeds into three separate Ledger addresses in September. On October 9, thieves emptied all three addresses in a single transfer to a wallet flagged as containing stolen funds.
Ledger Breach Details
Paris-based Ledger disclosed that customers in Southeast Asia reported losing funds after purchasing devices from Malaysia-based reseller CryptoBilis. The company determined the breach involved an organized crime operation where implants were installed into devices before they reached the market. These implants could read users' seed phrases, enabling criminals to drain wallets.
Ledger characterized the attack as one of the most sophisticated the digital asset industry has experienced. While the company has not disclosed total losses, blockchain investigator Specter reported that $86 million had been drained. CryptoBilis has ceased selling Ledger products.
Ledger stated it is working with law enforcement to trace funds and dismantle the attackers' infrastructure, and confirmed that no other vendors have been targeted.
Hardware Security Concerns
The Ledger breach is not the first major attack on cryptocurrency hardware this year. In July, attackers targeted Coldcard devices, stealing close to $120 million in bitcoin by exploiting a firmware bug that caused faulty seed generation, allowing hackers to guess user seed phrases.
