Cryptocurrency investor loses over $34,000 in theft through a second-hand hardware wallet

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A cryptocurrency investor’s holdings worth some $34,000 USD have been stolen through a ‘man in the middle’ attack via a second-hand hardware wallet.

Though cryptocurrency blockchains remain robust, storage mechanisms aren’t – and now, a devious new attack has resulted in a cryptocurrency investor losing over $34,000 USD through his use of a second-hand hardware wallet.

Posted on Reddit, user moodyrocket described a form of hardware hack – dubbed a ‘man in the middle’ attack – that resulted in the loss of thousands of dollars in various cryptocurrencies

Read: North Korea could be leading continuing attacks on South Korea’s leading cryptocurrency exchanges

Apparently, the investor in question purchased a second-hand hardware wallet to store his cryptocurrency holdings – however, the seller of the wallet inserted his own recovery seed rather than the seed assigned by the manufacturer of the hardware wallet – enabling the plunder of any cryptocurrency stored aboard the wallet.

Moodyrocket described the incident, offering:

“I have not used my Ledger in a week, today I decide to check the value of my XRP, Litecoin and Dash only to discover that all of them showed up as zero and had been transferred somewhere else yesterday all around the same time at 7:30pm. I am not sure how this is possible as I have not access my Ledger in a week…”

The incident marks the emergence of yet another means through which online hackers can easily swindle cryptocurrencies. Thankfully, Ledger Wallet CEO Eric Larchevêque responded to the post on Reddit, and has offered to ‘bring the seller to justice’ through legal means.

It remains to be seen how authorities might treat the case. In similar context, Chinese Bitcoin exchange OKEx was hacked for the sum of six hundred Bitcoins in 2016, and local police refused to investigate the matter, citing their belief that Bitcoin trading is representative of a type of pyramid scheme.

We’ll update this story as news emerges.

Read: Tether claims hackers have swindled over $30 million USD worth of tokens

What are your thoughts? What could be the safest way to store cryptocurrencies? How could investors guard against new attacks? Be sure to let us know your opinion in the comments below!

Follow Bryan Smith on Twitter: @bryansmithSA

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