In 2025, a case that shocked the cryptocurrency industry drew widespread attention: an investor's cold wallet containing cryptocurrency assets worth 50 million yuan was emptied in just a few hours. According to 23pds, the Chief Information Security Officer (CISO) of Slow Mist Technology, this tragedy stemmed from the investor purchasing a so-called "cold wallet" through Douyin. The private key of this wallet was stolen by hackers during initialization, and the funds quickly flowed out through the overseas money laundering platform "Huiwang," with little hope of recovery.
Cold wallets were originally seen as a "vault" for protecting cryptocurrency assets, but this case exposed fatal flaws in their supply chain and usage. This was not only a tragedy of personal wealth but also a wake-up call for the security of the entire cryptocurrency ecosystem. This article will delve into the details of the case, reveal the undercurrents of the cold wallet market, analyze security risks, and provide practical protection strategies for investors.
Case Restoration: From Trust to Collapse in Just a Few Hours
The cause of this case seems simple but is filled with carefully designed traps. The victim investor was attracted by an advertisement for a "brand new unopened" cold wallet on the Douyin platform, priced at only one-third of the official channel. The packaging was exquisite and came with so-called "official certification." Tempted by the low price and blind trust in the security of cold wallets, the investor quickly placed an order.
After receiving the wallet, he followed the instructions to initialize the device, generate a private key, and transfer cryptocurrency assets worth 50 million yuan into it. However, he did not anticipate that the firmware of this wallet had already been implanted with malicious code by hackers. The private key was leaked to the attackers at the moment of generation through a hidden mechanism. Within just a few hours, the hackers used the stolen private key to transfer the assets to multiple intermediary addresses, ultimately completing the money laundering through the "Huiwang" platform, with the funds flowing overseas and leaving no trace.
The method of operation in this case was not complex but exceptionally efficient. The hackers exploited the investor's trust in cold wallets and negligence towards informal channels, precisely targeting the weakest link in the security chain—the supply chain. From purchase to asset depletion, the entire process resembled a textbook case of cybercrime, revealing that cold wallets are not the absolute safe "myth" they are believed to be. Even more concerning is that this is not an isolated incident but rather the tip of the iceberg of counterfeit cold wallet scams in recent years.
The Underbelly of the Cold Wallet Market: The Rise of the Gray Industry Chain
Cold wallets (hardware wallets) have become the preferred tool for protecting cryptocurrency assets due to their offline storage of private keys. Brands like Ledger and Trezor dominate the market with reliable technology and reputation, but high prices and complex purchasing processes deter many novice investors. This has provided an opportunity for criminals. In recent years, a gray industry chain surrounding counterfeit cold wallets has quietly formed, especially on short video platforms like Douyin and Kuaishou, where this chaos has intensified. 23pds explicitly warned that 99% of cold wallets advertised as "brand new unopened" or "special price flash sales" online are fake, often hiding carefully designed traps behind them.
The production methods of these fake wallets are extremely cunning. Criminals replicate the packaging boxes, anti-counterfeiting labels, and even instruction manuals of well-known brands to create products that are indistinguishable from the real ones. Some fake wallets come pre-installed with fixed private keys, making it seem like users generate new private keys during initialization, but they actually fall into the hackers' trap. Others have malicious firmware built-in, using hidden networking functions to send private keys to hacker servers. Even more disturbing is that the second-hand wallet market has also become a hotspot for scams—criminals recycle old wallets, install malicious firmware, and sell them as "brand new." Short video platforms provide fertile ground for these fake wallets. The allure of low prices, fake review videos, and inflated ratings create a false sense of trust, luring inexperienced investors into traps. Victims are often new to cryptocurrency investment, with limited understanding of how cold wallets work, mistakenly believing that hardware wallets are inherently safe while ignoring the fatal risks of the supply chain.
Security Risks of Cold Wallets: A Dual Test of Technology and Human Nature
The security of cold wallets relies on the complete chain of private key generation, storage, and usage, but each link can become a breakthrough point for hackers. First, private key generation is the core of cold wallets, but fake wallets often undermine this process through pseudo-random number generators or pre-set private keys. For example, hackers may implant low-entropy random number generation algorithms in the wallet firmware, making the generated private keys predictable; or they may directly preset private keys, keeping every step of user initialization under their control. Even more frightening, some fake wallets disguise themselves as offline devices while actually connecting to the internet through USB ports or other hidden methods, sending private keys in real-time to attackers.
Supply chain attacks are another risk that cannot be ignored. From production to transportation to sales, the supply chain of hardware wallets is long, and any link can be infiltrated. Genuine wallets may be replaced with counterfeit products during logistics, anti-counterfeiting seals may be tampered with, or even the production process may have been manipulated by unscrupulous manufacturers. In 2020, Ledger experienced a database leak incident where customer information was exposed by hackers. Although it did not directly lead to asset loss, it revealed the vulnerability of supply chain management.
User behavior can also become a security risk. Even when using genuine wallets, improper operations can lead to asset exposure. For instance, many users take photos of their mnemonic phrases and store them on their phones or in the cloud, making them easy targets for hackers; some users mistakenly visit counterfeit wallet websites, downloading malicious firmware or directly entering private keys. Additionally, the physical storage of mnemonic phrases also poses risks; if stolen or lost, the consequences can be dire. These intertwined technical and human factors create a dual test for the security of cold wallets.
Protection Strategies: How to Safeguard Your Cryptocurrency Assets
In the face of the chaos and security risks in the cold wallet market, investors must take proactive measures to protect their assets. First, the choice of purchasing channels is crucial. The official websites of brands like Ledger and Trezor or authorized dealers are the only trustworthy purchasing avenues. "Flash sales" or "clearance" products on short video platforms or e-commerce sites often hide traps, so do not be tempted by low prices. After receiving the wallet, carefully check the anti-counterfeiting labels on the packaging and verify the device's serial number on the brand's official website to ensure the firmware has not been tampered with. Purchasing second-hand wallets is particularly risky; even if they appear "brand new," they may have malicious firmware installed.
When initializing the wallet, a secure environment is key. It is recommended to operate on a completely offline device to avoid leaking private keys. After initialization, you can use the official firmware verification tool to check whether the wallet is running the latest version of the firmware. Additionally, investors can test the random number generation behavior by resetting the wallet multiple times to observe for any abnormal patterns. The storage of private keys and mnemonic phrases is equally important. Mnemonic phrases should be handwritten on paper or engraved on metal plates and stored in a safe place, never stored on any connected devices. To further reduce risk, mnemonic phrases can be split and stored in different locations to avoid single-point failure.
Preventing online scams is also crucial. Hackers often lure users into entering private keys or downloading malicious firmware through fake websites, phishing emails, or social media ads. Investors should only trust information released by brand official websites and official social media accounts, remaining vigilant when encountering suspicious links or prompts to enter private keys. Furthermore, regularly monitoring industry security updates, such as security reports from Slow Mist Technology and CertiK, can help stay informed about emerging threats.
Conclusion: Security Awareness is the Best "Cold Wallet"
This theft case involving 50 million yuan is not only a tragedy of personal wealth but also a profound wake-up call for cryptocurrency investors. Cold wallets are not an absolute fortress of safety; their security depends on the reliability of the supply chain, the integrity of the device, and the user's habits. The proliferation of counterfeit cold wallets and the escalation of hacker techniques present unprecedented challenges for investors. In the rush to pursue cryptocurrency wealth, security awareness is the true "cold wallet." By choosing legitimate channels, exercising caution in operations, and properly safeguarding private keys, investors can protect their wealth in the unpredictable world of cryptocurrency. As 23pds warned: 99% of "special price" cold wallets are traps; only vigilance and knowledge can keep us away from the next 50 million yuan tragedy.
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Original Article: “The Cold Wallet Trap—Lessons from a 50 Million Yuan Crypto Theft Case”
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