Ledger Devices Pre-Seeded On Ebay: Difference between revisions
(Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/ledgerdevicespreseededonebay.php}} thumb|LedgerLedger hardware wallets were being resold through Ebay, with the company insisting these were safe to purchase. Criminal resellers initialized seed phrases on hardware wallets. and created fake instructions complete with scratch card seed words. This resulted in customers receiving official wallets with seed phrases already provide...") |
No edit summary |
||
| (2 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/ledgerdevicespreseededonebay.php}} | {{Imported Case Study 2|source=https://www.quadrigainitiative.com/casestudy/ledgerdevicespreseededonebay.php}} | ||
{{Unattributed Sources}} | |||
[[File:Ledger.jpg|thumb|Ledger]]Ledger hardware wallets were being resold through Ebay, with the company insisting these were safe to purchase. Criminal resellers initialized seed phrases on hardware wallets. and created fake instructions complete with scratch card seed words. This resulted in customers receiving official wallets with seed phrases already provided. It appears that at least one user got scammed and lost funds, though the details are not known. | [[File:Ledger.jpg|thumb|Ledger]]Ledger hardware wallets were being resold through Ebay, with the company insisting these were safe to purchase. Criminal resellers initialized seed phrases on hardware wallets. and created fake instructions complete with scratch card seed words. This resulted in customers receiving official wallets with seed phrases already provided. It appears that at least one user got scammed and lost funds, though the details are not known. | ||
This is a global/international case not involving a specific country. | This is a global/international case not involving a specific country.<ref name="reddit-6564" /><ref name="reddit-6565" /><ref name="reddit-6566" /><ref name="blockchair-6567" /><ref name="forbes-6873" /><ref name="btchiptwitter-6406" /><ref name="whotookmycrypto-7313" /><ref name="cryptosec-7371" /><ref name="briananderson99612medium-8181" /><ref name="reddit-8182" /><ref name="unnamed-11504" /><ref name="unnamed-11505" /><ref name="unnamed-11589" /> | ||
== About Ledger == | == About Ledger == | ||
| Line 41: | Line 42: | ||
Don't Include: | Don't Include: | ||
* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed. | * Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed. | ||
* Anything that wasn't reasonably knowable at the time of the event. | * Anything that wasn't reasonably knowable at the time of the event. | ||
| Line 62: | Line 62: | ||
!Description | !Description | ||
|- | |- | ||
|January 4th, 2018 12:46:00 PM | |January 4th, 2018 12:46:00 PM MST | ||
| | |Main Event | ||
| | |Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. | ||
|- | |- | ||
| | | | ||
| Line 74: | Line 70: | ||
| | | | ||
|} | |} | ||
== Technical Details == | |||
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited? | |||
== Total Amount Lost == | == Total Amount Lost == | ||
The total amount lost | The total amount lost has been estimated at $34,000 USD. | ||
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie? | How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie? | ||
| Line 87: | Line 86: | ||
== Total Amount Recovered == | == Total Amount Recovered == | ||
The total amount recovered is unknown. | |||
What funds were recovered? What funds were reimbursed for those affected users? | What funds were recovered? What funds were reimbursed for those affected users? | ||
| Line 93: | Line 92: | ||
== Ongoing Developments == | == Ongoing Developments == | ||
What parts of this case are still remaining to be concluded? | What parts of this case are still remaining to be concluded? | ||
== General Prevention Policies == | |||
== Prevention Policies == | |||
The safest strategy is to always buy the hardware wallet directly from Ledger and always be sure to initialize it with a newly generated seed phrase. While it is unlikely that someone who had tampered with a Ledger device would also send a seed phrase with the package, anything is possible. | The safest strategy is to always buy the hardware wallet directly from Ledger and always be sure to initialize it with a newly generated seed phrase. While it is unlikely that someone who had tampered with a Ledger device would also send a seed phrase with the package, anything is possible. | ||
When setting up a new wallet of any sort, it is also a good practice to only transfer a small quantity of funds first, transferring the rest if those funds remain safe. This minimizes damage from any theft incident involving immediate removal of the funds. Advanced users may also set up a multi-sig with hardware wallets from different manufacturers all required to sign the outgoing transaction. You should also test the wallet to make sure that you can withdraw funds and didn't make a mistake in the setup. | When setting up a new wallet of any sort, it is also a good practice to only transfer a small quantity of funds first, transferring the rest if those funds remain safe. This minimizes damage from any theft incident involving immediate removal of the funds. Advanced users may also set up a multi-sig with hardware wallets from different manufacturers all required to sign the outgoing transaction. You should also test the wallet to make sure that you can withdraw funds and didn't make a mistake in the setup. | ||
== Individual Prevention Policies == | |||
{{Prevention:Individuals:Placeholder}} | |||
{{Prevention:Individuals:End}} | |||
== Platform Prevention Policies == | |||
{{Prevention:Platforms:Placeholder}} | |||
{{Prevention:Platforms:End}} | |||
== Regulatory Prevention Policies == | |||
{{Prevention:Regulators:Placeholder}} | |||
{{Prevention:Regulators:End}} | |||
== References == | == References == | ||
[https://www.reddit.com/r/ethtrader/comments/7og50a/warning_brutal_scam_guy_buys_a_ledger_nano_wallet/ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : ethtrader] (Feb 13) | <references><ref name="reddit-6564">[https://www.reddit.com/r/ethtrader/comments/7og50a/warning_brutal_scam_guy_buys_a_ledger_nano_wallet/ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : ethtrader] (Feb 13, 2022)</ref> | ||
<ref name="reddit-6565">[https://www.reddit.com/r/ledgerwallet/comments/7obot7/all_my_cryptocurrency_stolen/ All my cryptocurrency stolen : ledgerwallet] (Feb 13, 2022)</ref> | |||
<ref name="reddit-6566">[https://np.reddit.com/r/ledgerwallet/comments/7obot7/all_my_cryptocurrency_stolen/ds8khhw/ moodyrocket comments on All my cryptocurrency stolen] (Feb 19, 2022)</ref> | |||
<ref name="blockchair-6567">[https://blockchair.com/litecoin/block/1344673 Litecoin / Block / 1344673 — Blockchair] (Feb 20, 2022)</ref> | |||
[https://www. | <ref name="forbes-6873">[https://www.forbes.com/sites/leemathews/2021/06/18/cybercrooks-are-mailing-users-fake-ledger-devices-to-steal-their-cryptocurrency/ Cybercrooks Are Mailing Users Fake Ledger Devices To Steal Their Cryptocurrency] (Mar 6, 2022)</ref> | ||
[https:// | <ref name="btchiptwitter-6406">[https://twitter.com/BTChip/status/949679898012078082 @BTChip Twitter] (Feb 13, 2022)</ref> | ||
[https:// | <ref name="whotookmycrypto-7313">[https://whotookmycrypto.com/ledger-wallet-scams/ Nasty Ledger wallet scams. And how to avoid them. - Who Took My Crypto] (Mar 20, 2022)</ref> | ||
[https:// | <ref name="cryptosec-7371">[https://cryptosec.info/ledger-scams/ 6 Ledger Wallet Scams That You Should Know About - CryptoSec] (Mar 20, 2022)</ref> | ||
[https:// | <ref name="briananderson99612medium-8181">[https://medium.com/@briananderson_99612/scam-alert-a-cautionary-tale-on-the-purchase-of-cryptocurrency-wallets-from-third-party-vendors-5c300acd7d0e https://medium.com/@briananderson_99612/scam-alert-a-cautionary-tale-on-the-purchase-of-cryptocurrency-wallets-from-third-party-vendors-5c300acd7d0e] (Jun 26, 2022)</ref> | ||
[https:// | <ref name="reddit-8182">[https://www.reddit.com/r/Ripple/comments/7ol7zb/i_am_the_guy_that_lost_25000_due_to_ledger_scam I am the guy that lost £25000 due to Ledger scam (not $34000 life savings) : Ripple] (Jun 26, 2022)</ref> | ||
[https:// | <ref name="unnamed-11504">[https://np.reddit.com/r/btc/comments/7ofrqf/warning_brutal_scam_guy_buys_a_ledger_nano_wallet/ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : btc] (Aug 21, 2023)</ref> | ||
[https:// | <ref name="unnamed-11505">[https://np.reddit.com/r/ledgerwallet/comments/7obot7/all_my_cryptocurrency_stolen/ All my cryptocurrency stolen : ledgerwallet] (Oct 17, 2022)</ref> | ||
[https:// | <ref name="unnamed-11589">[https://old.reddit.com/r/Bitcoincash/comments/7ogq02/warning_brutal_scam_guy_buys_a_ledger_nano_wallet/ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : Bitcoincash] (Oct 17, 2022)</ref></references> | ||
Latest revision as of 10:05, 1 September 2023
Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' and 'General Prevention' sections to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.
Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!
Ledger hardware wallets were being resold through Ebay, with the company insisting these were safe to purchase. Criminal resellers initialized seed phrases on hardware wallets. and created fake instructions complete with scratch card seed words. This resulted in customers receiving official wallets with seed phrases already provided. It appears that at least one user got scammed and lost funds, though the details are not known.
This is a global/international case not involving a specific country.[1][2][3][4][5][6][7][8][9][10][11][12][13]
About Ledger
"Based in France, Ledger is the largest cryptocurrency hardware wallet company." "Ledger is a hardware cryptocurrency wallet that is used to store, manage, and sell cryptocurrency. The funds held in these wallets are secured using a 24-word recovery phrase and an optional secret passphrase that only the owner knows."
"Ledger offers two products, the Nano S and Nano X, that can store the digital keys used to secure crypto wallets. The devices can be used with a variety of cryptocurrencies, are compatible with numerous apps, and are supposed to offer a safe way to manage crypto without compromising too much on convenience. Ledger says on its website that it has sold 1.5 million products to customers in 165 countries to date."
"The seller didn't "compromise the package", he opened a simple box, setup a new seed on the ledger with the pin "5555", made a convincing card to go in the box that includes the seed on a scratch off and directions to use, then put it all back in the box like it was never opened."
"My Ledger Nano S arrived today and I noticed some weird things about this one compared to youtube tutorials i've seen before purchasing that have me a little concerned."
"[A] scam Ledger Nano (bought on Ebay) came with a "scratch off" paper, to reveal the seed words. With a real Ledger Nano, the seed words are generated by the device." "Custom scratch offs... wow. I realize not much effort to do it, but enough to trick someone."
"The Ledger he bought was (almost certainly) the real device, not a fake. The scammer initialised the device and generated the seed on the device before sending it to the victim. The victim, not knowing any better, used this pre-made, compromised seed."
"Had [t]he victim reset the device when he got it (getting a new 24 word seed) then he would have been perfectly fine."
"The first is when I started the device for the first time, it didnt ask me if i wanted to set up the device as new or restore a old one. Not only that the PIN was set to 5555 as stated on the welcome card. It also didnt give me the seed words and they appear to be on a "scratch card" included with the device. The Paper work looks legit but I wiped the device and set it up again to be safe. It also works with the Chrome Apps fine."
"I have not used my Ledger in a week, today I decide to check the value of my XRP, Litecoin and Dash only to discover that all of them showed up as zero and had been transferred somewhere else yesterday all around the same time at 7:30pm. I am not sure how this is possible as I have not access my Ledger in a week. I do not know what do to as the total value is over £25000, has by currency been stolen or is it something else? I am at a lost here and right now feel so physical sick. Some please help."
Ledger responded to "Please contact us directly by PM with your email. We'll put you in touch with our General Counsel so we can help you file a formal criminal complaint and bring the eBay seller to justice."
This is a global/international case not involving a specific country.
The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.
Include:
- Known history of when and how the service was started.
- What problems does the company or service claim to solve?
- What marketing materials were used by the firm or business?
- Audits performed, and excerpts that may have been included.
- Business registration documents shown (fake or legitimate).
- How were people recruited to participate?
- Public warnings and announcements prior to the event.
Don't Include:
- Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
- Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.
The Reality
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
- When the service was actually started (if different than the "official story").
- Who actually ran a service and their own personal history.
- How the service was structured behind the scenes. (For example, there was no "trading bot".)
- Details of what audits reported and how vulnerabilities were missed during auditing.
What Happened
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
| Date | Event | Description |
|---|---|---|
| January 4th, 2018 12:46:00 PM MST | Main Event | Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. |
Technical Details
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?
Total Amount Lost
The total amount lost has been estimated at $34,000 USD.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Total Amount Recovered
The total amount recovered is unknown.
What funds were recovered? What funds were reimbursed for those affected users?
Ongoing Developments
What parts of this case are still remaining to be concluded?
General Prevention Policies
The safest strategy is to always buy the hardware wallet directly from Ledger and always be sure to initialize it with a newly generated seed phrase. While it is unlikely that someone who had tampered with a Ledger device would also send a seed phrase with the package, anything is possible.
When setting up a new wallet of any sort, it is also a good practice to only transfer a small quantity of funds first, transferring the rest if those funds remain safe. This minimizes damage from any theft incident involving immediate removal of the funds. Advanced users may also set up a multi-sig with hardware wallets from different manufacturers all required to sign the outgoing transaction. You should also test the wallet to make sure that you can withdraw funds and didn't make a mistake in the setup.
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : ethtrader (Feb 13, 2022)
- ↑ All my cryptocurrency stolen : ledgerwallet (Feb 13, 2022)
- ↑ moodyrocket comments on All my cryptocurrency stolen (Feb 19, 2022)
- ↑ Litecoin / Block / 1344673 — Blockchair (Feb 20, 2022)
- ↑ Cybercrooks Are Mailing Users Fake Ledger Devices To Steal Their Cryptocurrency (Mar 6, 2022)
- ↑ @BTChip Twitter (Feb 13, 2022)
- ↑ Nasty Ledger wallet scams. And how to avoid them. - Who Took My Crypto (Mar 20, 2022)
- ↑ 6 Ledger Wallet Scams That You Should Know About - CryptoSec (Mar 20, 2022)
- ↑ https://medium.com/@briananderson_99612/scam-alert-a-cautionary-tale-on-the-purchase-of-cryptocurrency-wallets-from-third-party-vendors-5c300acd7d0e (Jun 26, 2022)
- ↑ I am the guy that lost £25000 due to Ledger scam (not $34000 life savings) : Ripple (Jun 26, 2022)
- ↑ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : btc (Aug 21, 2023)
- ↑ All my cryptocurrency stolen : ledgerwallet (Oct 17, 2022)
- ↑ WARNING: Brutal scam. Guy buys a Ledger Nano wallet on Ebay, and it steals all his cryptocurrency ($34,000, which is his life's savings). : Bitcoincash (Oct 17, 2022)