Cautionary Tale: $7M Lost by Crypto Investor Who Bought Discounted Cold Wallet

Explore key highlights within the DeFi area. This article dives into: “Cautionary Tale: $7M Lost by Crypto Investor Who Bought Discounted Cold Wallet”.

• A Chinese crypto investor has misplaced nearly US$7 million value of crypto property after shopping for a reduced chilly wallet by a web-based market, which turned out to be compromised.
• Blockchain safety agency SlowMist believes the sufferer’s property had been funnelled by the infamous Huiwang, an organization infamous for facilitating cybercrime.
• SlowMist has warned individuals to not purchase discounted chilly wallets by unofficial channels.

News Flash! Buying a bargain-basement crypto chilly wallet from a dodgy web site or a social media market might not be an amazing monetary choice.

A Chinese crypto investor learnt this lesson the exhausting approach after dropping nearly US$7 million (AUD$10.7m) value of crypto property because of shopping for a reduced, and compromised, chilly wallet by Douyin, the Chinese model of TikTok. Douyin has a market the place customers should buy and promote merchandise, just like Facebook Marketplace.

Blockchain safety agency, SlowMist, mentioned the wallet’s private key was “compromised at creation” and the consumer’s US$6.5 million in digital property had been “drained within hours.”

Last night time, We acquired an emergency report: a consumer misplaced $6.5M value of crypto from a chilly wallet.

The wallet was purchased through Douyin (TikTok China), however the private key was compromised at creation — and funds had been drained inside hours.

Cold wallet ≠ Safe

Avoid “Factory… https://t.co/YDV4EgxD3a

— SlowMist (@SlowMist_Team) June 14, 2025

SlowMist warned its followers that merely utilizing a chilly wallet doesn’t essentially imply their digital property are secure, cautioning towards shopping for discounted wallets by unofficial channels:  

Avoid ‘Factory sealed’ or ‘Discounted cold wallets’ — 99% are tampered.

SlowMist, blockchain safety agency

Related: US–China Tariffs Shake Markets as Australian Analysts Weigh In on “Handshake Agreement”

Crypto Assets “Evaporated” Overnight

A Chinese X/Twitter consumer who goes by the deal with Hella claimed the sufferer was an in depth pal who’d contacted him the earlier night time to tell him of the theft. In his put up, (translated from Mandarin to English utilizing Google Translate) Hella mentioned:

Nearly 50 million evaporated in a single day! Just as a result of I purchased a ‘cold wallet’ on Douyin? A bloody lesson! A late night time cellphone name gave me chills! An in depth pal of mine had simply skilled the darkest second of his life – practically 50 million RMB value of cryptocurrency he held was stolen!

Chinese Twitter consumer Hella

Hella described the theft as a “carefully designed hot trap”, including that the stolen property had been “washed away through Huiwang within a few hours”. According to Hella, the stolen property had been traced to Huiwang by SlowMist after the sufferer contacted the blockchain safety agency for assist recovering their property.

Huiwang, also called Huione Group, is a Cambodian-based group of corporations which affords quite a lot of providers together with cost processing, largely servicing the scamster and fraudster markets. The conglomerate has a wealthy historical past of being extensively utilized by cybercriminals for cash laundering. Earlier this 12 months the US Treasury Department sought to blacklist Huione Group from the US monetary system over considerations surrounding its facilitation of cybercrime.

SlowMist’s chief data safety officer, posting on X / Twitter below the deal with 23pds, reiterated the dangers of shopping for chilly wallets by unofficial channels: “Purchase of cold wallets must be done through official channels!” 23pds mentioned. 

Don’t gamble your whole fortune on a ‘wallet’ that’s a couple of hundred bucks cheaper — that’s not saving cash, it’s throwing your life away!

SlowMist chief data safety officer

Aussie Crypto Users Not Immune From Scams

While this explicit rip-off hit a Chinese investor, Aussies are additionally very a lot in danger.

In April, the Federal Court dominated that the Australian Securities and Investments Commission (ASIC) might proceed with its plan to close down 95 corporations engaged in crypto and romance scams recognized colloquially as ‘pig butchering’.

Related: Crypto ATM Scams Rip Off Aussies: Seniors Bear the Brunt

ASIC’s Deputy Chair, Sarah Court, mentioned eliminating the danger posed by these dodgy corporations could be very troublesome and urged Aussies to proceed to be on the look out for these sorts of scams:

These scams are like hydras: you shut down one and two extra take its place. That’s why we’re warning customers that the specter of scams and id fraud stays excessive. We remind customers to be vigilant.

ASIC’s Deputy Chair, Sarah Court

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