Bitcoin Gold Wallet Scam Nets $3 Million in Illicit Earnings

More than $3.3 million has been stolen as partial of an elaborate rascal that took advantage of bitcoin users seeking to explain their share of a newly combined cryptocurrency bitcoin gold.

Perpetrated by a operators of a website called, a intrigue stirred users to contention their private keys or liberation seeds as a means to beget bitcoin bullion wallets, as seen on an Internet Archive snapshot. Shortly after users did so, however, a cryptocurrency land in their wallets were sent to opposite addresses.

At slightest $30,000 in ethereum, $72,000 in litecoin, $107,000 in bitcoin bullion and some-more than $3 million in bitcoin were confiscated, according to self-reported numbers accurate by CoinDesk.

In an interview, victims blamed a organisation of a website with a central bitcoin bullion plan as a source of a efficacy of a operation.

One of a victims, Mikel Martin, explained to CoinDesk:

“I reached this site by following a couple during [the] central website so we devoted it. Yesterday afternoon we beheld both my BTC and BTG stored in that wallet were gone.”

Safety assurances?

Before a thefts became apparent, a group behind bitcoin bullion – an bid to emanate a new chronicle of bitcoin that would shorten a forms of hardware that can be used for mining – promoted on their Twitter account, assuring users that it was safe to use on multiple occasions.

The chairman behind a use was, to an extent, ingratiated in a nascent BTG community, including a Slack channel. The website was grown by a user named John Dass, yet it is misleading either this is a developer’s tangible name or a pseudonym.

Further, a Bitcoin Gold website also enclosed a change checking apparatus formed on formula that was common on GitHub on their website for a brief duration of time, yet a window usually asked for a wallet residence and enclosed a disclaimer that users shouldn’t share private keys. The Bitcoin Gold group has simplified that a antagonistic formula itself was never benefaction on their central website.

Yet once a thefts became apparent, a news fast spread.

An analysis of a site’s code by Reddit user Uejji 4 days ago found that a site stored a liberation keys, that were after sent to a site’s owner. The site claimed to be open-source, though all of a source formula was changed on GitHub after a rascal was initiated, pronounced Torsten Sandor, a orator for Exodus, a digital wallet whose users mislaid supports in a scam.

Some of a victims of a rascal used this wallet, that authorised a association to put together how a rascal operated for one of their users, he said.

“The user gave his liberation seed to a site and his wallet emptied,” he told CoinDesk, adding:

“This usually happened with bitcoin gold. It’s a really engaging flare … we consider it’s intensely hapless that new investors, people who know small about crypto, started shopping into it.”

Scam response

Representatives from a bitcoin bullion contend they’re relocating to figure out a pill to a situation.

After initial being done wakeful of a scam, a launched an inner investigation, according to orator Edward Iskra. In a published statement, Bitcoin Gold developers pronounced they were “working with confidence experts to get to a bottom of this issue,” though did not explain who these experts were.

Iskra told CoinDesk that, initially, John Dass claimed ignorance during this investigation.

“The review increasingly indicated that a strange developer, ‘John Dass,’ was obliged for a rascal all along … He has forsaken out of hold with us, as well,” he said.

While Dass was in a bitcoin bullion Slack channel with a “developer” tag, he was not a partial of a project’s grave team, Iskra said.

There was “no grave attribute during all. He did correlate with a devs in a Slack per building his open-source formula [and] his web site,” he told CoinDesk. “The BTG Twitter comment was simply ancillary an particular in a village who was ancillary BTG – that was their solitary intent, during a time.”

The Bitcoin Gold group will make a serve proclamation about their review within a subsequent few days, Iskra said.

Mybtgwallet picture around Nikhilesh De / CoinDesk; Car with boot around Shutterstock

Correction: A prior chronicle of this essay inaccurately indicated that a fake BTG wallet was embedded on their central website. This news has been updated for clarity. 

The personality in blockchain news, CoinDesk is an eccentric media opening that strives for a top journalistic standards and abides by a strict set of editorial policies. Have violation news or a story tip to send to a journalists? Contact us during

More tabs ...

  • The Great Bitcoin ScamThe Great Bitcoin Scam At the outset, let me clarify that Bitcoin itself is not a scam, but how Bitcoin is being sold is a scam. More about that below. To start out, it is important to understand what Bitcoin […]
  • How to Keep Your Bitcoin Safe and SecureHow to Keep Your Bitcoin Safe and Secure Owning cryptocurrency isn't quite the Wild West experience it was at the beginning of the decade, but investors still face plenty of instability and risk. The threats aren't just abstract […]
  • CoinMarketCap Quietly Removes BCH-Promoting From Its BTC PageCoinMarketCap Quietly Removes BCH-Promoting From Its BTC Page Major Cryptocurrency price tracking site CoinMarketCap (CMC) has removed the website from its Bitcoin (BTC) page as of today, May 6. Though there was no official announcement […]

Posted in
Tagged . Bookmark the permalink.
short link