Email Scams threaten Crypto Industry
The crypto community has been duped by fraudulent emails posing as crypto exchanges into creating wallets using pre-generated recovery phrases under scammers. Attacks using social engineering have also increased; hackers have hacked Kaito AI’s social media accounts to influence token prices, and malware-laden spoof Zoom calls have targeted cryptocurrency founders.
Furthermore, physical attacks and high-profile security breaches are becoming more common, Kaito AI and its creator Yu Hu were the targets of a social media hack in which hackers took over the project’s X account and disseminated misleading information. The attackers warned users that their money wasn’t secure and said Kaito wallets were compromised.
On-chain investigator DeFi Warhol disclosed that the hackers established a short position on KAITO before making the false announcements, affirming that posts were part of a larger plan to manipulate the price of KAITO tokens. The criminals intended to cause panic selling to crash the token’s price and profit from the market decline.
Phishing scams that users of popular exchanges like Coinbase and Gemini are on the rise in the cryptocurrency industry. Phishing emails purporting to be from these platforms have been sent by cybercriminals advising users to switch to self-custodial wallets.
The emails include pre-generated recovery phrases that scammers control but also offer comprehensive instructions to download the genuine Coinbase Wallet or Gemini’s wallet service. Once users set up wallets using these phrases and transfer their assets, the threat actors can instantly drain their funds.
Coinbase warned its users not to trust pre-generated recovery phrases. The American-listed crypto exchange advised caution and reaffirmed that it would never send such messages.
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