Action 5 News reports a real-life example of a consumer who was scammed into revealing his cryptocurrency wallet seed phrase — with all-too-sad and predictable results:
A Charlotte man lost more than $1 million in cryptocurrency after falling victim to a phone scam that began with a caller claiming to be from a legitimate crypto company.
Gene Duckett said he received a call one Friday night in March from someone claiming to be from Ledger, a company that makes hardware wallets for cryptocurrency storage.
“The guy on the other end says, ‘Is this Harold? I’m Harold Eugene.’ I said, ‘Yeah, who’s calling?’ He said, ‘My name is Benjamin. I’m from Ledger, and your funds are in danger of being stolen,’” Duckett said.
The caller directed Duckett to a website where he could supposedly secure his funds. The scammers used a multi-step approach to gain his trust.
“They said they needed to give me a security code so that I would know when someone called back that it was a correct person,” Duckett said.
When a second person called who knew the security code, Duckett felt comfortable typing his seed phrase into the website. A seed phrase is a secret recovery phrase that must be entered to access cryptocurrency funds.
After entering his information, Duckett received a call from a third person who told him something had gone wrong.
“He says, ‘Oh, something went wrong.’ And so as soon as he said that, I looked on the XRP Ledger and I had saved my wallet address in there and all of the funds that were in my wallet were gone,” Duckett said.
The caller then hung up, and Duckett realized his funds had been stolen.
“It was $1,038,000. That’s how much it was worth. It is a lot of money,” Duckett said.
Read more at Action 5 News.
