Radhika Parashar
- Cold wallets are considered safer because they are not connected to the web
- Police will never ask you to take action on your cold storage device, the North Wales police have informed crypto holders
- The police have also encouraged individuals to report such calls to the nearest stations
Crypto scammers in the U.K are now shifting their focus on stealing funds from cold storages. This week, the North Wales Police alerted the community that scammers have been impersonating as law enforcement officials to phish victims. The unit disclosed that it is currently investigating a similar case where the victim lost $2.8 million.
Describing details on this particular case, the North Wales police claimed that the scammer(s), impersonating as police personnel, created a fake security breach story to play on the panic factor of the victim and managed to access funds stored on a offline wallet, also referred to as a cold storage.
“They claimed they had arrested an individual whose phone contained the victim’s personal identification documents, emphasizing a potential security breach. The scammer then exploited this sense of fear and urgency, instructing the victim to ‘secure their assets’ by logging into their cold storage device via a link they provided,” the statement from the officials noted.
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The victim believed that they were following directions from the police, clicked on the malicious link that redirected them to a scam website and ended up entering their password. This gave access to their wallet to the scammers — who drained assets worth $2.8 million. The officers are now working to trace the lost funds.
As a warning to the crypto community, the police clarified that they would never reach out with unexpected interest in the crypto activities of individuals.
“Police will never ask you to take action on your cold storage device. This is a big red flag,” the statement said, asking people to report such calls to their area’s police station immediately. “Your seed phrase (password) is your key. Never enter it anywhere except on your cold storage device itself during the initial setup or recovery process. A legitimate company or Police will never ask for it.”
Citing this case as an example, the British police have asserted that crypto scammers are only getting more sophisticated in their attacks using social engineering tricks and schemes.
The international crypto industry is concerned about the rising number of hacks and scams targeting the sector — putting the industry at a major risk of being exploited and subsequently, restricted.
Just this week, crypto giants including TRM Labs, Binance, Coinbase, Kraken, PayPal, Robinhood, Ripple, Crypto.com, OKX, and Bitfinex among others united to create a real-time crypto crime detection system called the Beacon Network. The initiative is aimed at detecting the movement of illegally obtained crypto funds as soon as possible.
