MetaMask Wallet Funds Taken anonymizeme

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MetaMask Logo/Homepage

Reddit user anonymizeme used MyEtherWallet to set up their wallet, storing the seed phrase at the time on the Evernote cloud storage service. The seed phrase was then imported to MetaMask and wallets were generated on BNB (Binance Smart Chain) and FTM (Fantom) using the same private key.

After breaching the Evernote account, most likely through finding the username and password in a previously breached database, the hacker was able to obtain the seed phrase, derive the BNB and FTM wallets, and retrieve those funds.

The total tokens taken were 235.91 BNB, 1 Wrapped Ethereum, 1,853.73 Fantom, 110,455.80 KnightSwap Token, 3,336.39 Knight LP, and 17,372.10 Undead Finance Tokens. The total value is $196,649.10 when using 0.1062 for Undead Finance, no value for the Knight LP, and closing market values of December 14th, 2021 for all other tokens.

Fortunately for anonymizeme, the hacker was incredible careless and brought the funds to a wallet with a KYC/account link to Binance, Houbi, and OpenSea. They don't appear to have taken any effort to obscure the funds.

As such, when the Reddit community became aware and started investigating, the thief got incredibly scared and return some BNB. Over 236 BNB was returned to the original wallet, worth $120650.30 using the closing market price on December 14th, 2021. The remaining loss to anonymizeme is $75998.85.

This is a global/international case not involving a specific country.

About anonymizeme

"Mac." "I stupidly did not" "have [my MetaMask] linked to a ledger."

About MetaMask

MetaMask is a "crypto wallet & gateway to blockchain apps. Start exploring blockchain applications in seconds. Trusted by over 21 million users worldwide." "Available as a browser extension and as a mobile app, MetaMask equips you with a key vault, secure login, token wallet, and token exchange—everything you need to manage your digital assets."

The Reality

Blockchain transactions are irreversible.

What Happened

"My wallet has been hacked- it's adding up to about a $175k loss (not including appreciation later)... trying to figure out how they got access, but is there anyway to track this person down?"

Key Event Timeline - MetaMask Wallet Funds Taken anonymizeme

Date	Event	Description
December 14th, 2021 3:52:44 AM 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

Blockchain Transactions/Wallets:

BNB:

Fantom:

Other:

"If they got your 12 word seed phrase or the private keys, those unlock all the other compatible chains. I'm not sure how it works on MEW, but I assume it's similar to MetaMask."

"So, I connected MEW to MetaMask. I thought that was Ethereum network only. From there, I opened up other networks - BNB, AVAX, etc, and thought that was different than the original MEW."

"From evernote they got seed From seed they got both pvt key and public key They check etherscan/bscscan etc for assets related to public key. Since they have pvt key they can drain them all!"

"Hardware wallet won't save you if you keep your seeds in Evernote and if understood correctly that's how OP's funds were stolen." "It wouldn’t have helped in this case because OP got hacked because he was storing his private keys in Evernote which had 3 security breaches in the past 2 years. A hardware wallet is useless if you’re just going to throw your private keys on the cloud anyway."

Total Amount Lost

"My wallet has been hacked- it's adding up to about a $175k loss (not including appreciation later)... trying to figure out how they got access, but is there anyway to track this person down?"

The total amount lost has been estimated at $197,000 USD.

Immediate Reactions

"I cried in the middle of Starbucks, called myself a million names, then realized I had to keep it moving. I'm trying to recover the funds..."

"I'm not sure - I got an email saying an Android logged into my Evernote. I immediately started moving stuff but didn't realize MEW was connected to BNB. I now have 2FA on Evernote too - didn't realize that was an option." "I checked the IP and it looked like a spoofed one."

"They got access to my Evernote which had MyEtherWallet details on it. I caught it and immediately transferred all my ETH funds, but they somehow got to BNB which isn't even supported on MyEtherWallet."

"Well, I didn't realize it and didn't think MEW connected to BNB. I caught it and moved my ETH stuff immediately. But yes - highly stupid me."

"From what I've seen in other comments, OP had 175k worth of crypto stored in a Metamask wallet, where the seed phrase was stored online via Evernote. Probably had their Evernote credentials leaked in one of the various data leaks, an attacker gained access to their Evernote account and hence their Metamask seed phrase, and then gained access to their crypto."

"[I] was thinking it was a malicious smart contract. That's even worse...175k pasted on Evernote...ffs might as well put there their bank details and pin."

"[I]f the contract created is malicious, it's written to drain funds when you sign it from your hardware wallet then you're screwed. So you need to always be certain what transaction you are signing is in fact what you want and coming from a legit (non phished) website."

"Thanks for the empathy. I know I was stupid. I was staking and didn't think I could do it with a BNB wallet. Lesson sadly learned."

Ultimate Outcome

"Your money is still on scammers wallet. Keep track of their transactions. If they try to move them to a CEX, you can get it back. If someone has the time to go through this wallet's old tx, there may be a lead somewhere."

"Hey I did some digging for you[. He's] KYC on binance. From the ad[d]ress you gave us, [h]e [t]ransfer[red] out the stolen funds to [a] secondary wallet. [T]he second wallet got funded for 0.1 bnb 67 days ago. And the last wallet was funded via [B]inance hot wallet 4 times in the last 77 days."

"Make sure to contact [B]inance[. P]rovide them with this information and when he tries to cash out via [B]inance they will freeze hes assets until you make a claim with the authorities, hope you all the best."

"I beli[e]ve I found the Third wallet from the hacker also KYC with [B]inance and tied to the other 2 wallets on multiple oc[c]asions and multiple timeframes (means wasnt just a poor guy who got hacked and drained)."

There's a "transfer from [the] third wallet to [the] second wallet (second wallet is KYC wallet that funded the wallet that holds the stolen funds)." "This basicly proves that the hacker owns the 3 wallets because he[']s just sending multiple transactions over the 3 wallets on different time dates, 2 wallets are KYC (binance can check if its the same person)."

"This basicly proves that the hacker owns the 3 wallets because he[']s just sending multiple transactions over the 3 wallets on different time dates, 2 wallets are KYC (binance can check if its the same person)."

"[O]n BSC you can see other chains with same wallet ad[d]ress. [O]ne transaction 60 days ago, of HT which is Huobi token, which if [I] read correctly you need to KYC in order to deposit. [M]aybe try to contact Huobi[. T]hey could find the user that withdrew to their ad[d]ress."

"[I]t seems they [also] interacted with [an] OpenSea account, so it's possible they will try to. You could contact OpenSea and notify them to blacklist the adress as well, since they could try laundering the money through NFTs."

"I don't know if he saw this post and got spooked, or WHAT happened, but he returned back 236 BNB today!"

"He hasn't returned my FTM yet, I am not sure if he sent back *ALL* of the BNB, and I am out a few thousand dollars in gas fees, plus the money I lost when accidentally sending DeRace to the wrong wallet when I was trying to move fast."

"I think I'm down maybe $50k, maybe less, need to check."

"BUT HE GAVE ME THE BULK BACK!! THANK YOU SO MUCH!!!!!!"

"Praying for you OP! You've got a hell of a community here helping you out, let's get this [scamm]er!"

"OP, if you have the funds back in your wallet you need to move them out of that compromised address right now! Create a new wallet and do that ASAP. Congrats on getting it back!!"

Total Amount Recovered

The attacker ultimately returned a portion of the stolen funds after community investigation showed they were linked to KYC accounts on multiple exchanges.

The total amount recovered has been estimated at $121,000 USD.

Ongoing Developments

TBD

Individual Prevention Policies

The primary failure was storing a seed phrase online. Additional failures were also reusing passwords across websites and storing most funds in the same active wallet.

The best practice is to keep the majority of funds offline in a newly generated wallet which has never been online. All copies of the seed phrase or private key should be stored physically offline and never backed up online. Only bring funds to an online active wallet when performing a specific transaction, and return them offline as soon as possible.

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

Private keys can be obtained through seed phrases, mnemonics, private key files, mobile synchronization screens, wallet export features, wallet backups, etc... Never ever send these to anyone else who you do not intend to allow to take all of your money. Attackers will use a wide variety of tactics to convince you like pretending to be your wallet software, pretending they work for the wallet software, or asking you to screen share. Don't fall for them.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

While in this case, a large portion of the lost funds were recoverable, a more sophisticated attacker could have better covered their tracks through privacy protocols and coins. It is therefore critical that users know how to protect themselves and prevent incidents from happening.

Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.

An industry insurance fund can be set up to assist victims. While the amount of relief provided is discretionary, payouts could happen much faster and more information could be gathered on the crime.

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

While in this case, a large portion of the lost funds were recoverable, a more sophisticated attacker could have better covered their tracks through privacy protocols and coins. It is therefore critical that users know how to protect themselves and prevent incidents from happening.

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

An industry insurance fund can be set up to assist victims. While the amount of relief provided is discretionary, payouts could happen much faster and more information could be gathered on the crime.

Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.