Over $3.3 million has been reported stolen in an intricate scam that duped bitcoin users who were aiming to capture their share of the newly established cryptocurrency, bitcoin gold.
Carried out by operators of the website mybtgwallet.com, the swindle started with a prompt asking the users to forward their private keys or recovery seeds to generate bitcoin gold wallets, as seen on an Internet Archive snapshot.
However, they later found out that the cryptocurrency holdings in their wallets were sent to various addresses.
Numbers indicate that at least $30,000 in ethereum, $72,000 in litecoin, $107,000 in bitcoin gold and more than $3 million in bitcoin were seized.
Before the theft was verified, the team behind bitcoin gold – an endeavor to formulate an updated version of bitcoin that would limit the types of hardware that can be utilized for mining – endorsed mybtgwallet.com on their social media account, sending out a vote of confidence to users that it was harmless to use on multiple occasions.
They also briefly rooted the tool on their website, though the window only requested for a wallet address and displayed a disclaimer that users shouldn’t share private keys.
The person responsible for the service was ingratiated in the nascent BTG community, including its Slack channel. The website was created by a user named John Dass, though it has yet to verified if that is his real identity or a mere pseudonym.
An analysis of the site’s code by revealed that the site kept the recovery keys, which were later forwarded to the site’s owner.
The site declared to be open-source, but all of the source code was amended on GitHub after the scam was started, said Torsten Sandor, a spokesperson for Exodus, digital wallet whose users lost resources in the scam.
“The user gave his recovery seed to the site and his wallet emptied,” Sandor 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,” he added.
Representatives from the bitcoin gold have stated that they are making moves to resolve the distressing situation.
In a published statement, Bitcoin Gold developers divulged that they were “working with security experts to get to the bottom of this issue,” but did not say who these people were.
- Token Discussion Panel Turns Heated! 27 November 2017
- Bitcoin Price Sets New All-Time High at Over $9,000! 27 November 2017
- Cryptocurrencies “More of Investment” 27 November 2017
- Bermuda Launches Cryptocurrency Task Force 27 November 2017
- Dnata Partners with IBM for Air Cargo Blockchain Pilot 27 November 2017