Bitcoin exchanges blacklisted the scammers’ wallets to prevent further theft of Bitcoin
Last week, Twitter was hit by one of the worst security breaches in the microblogging platform’s history, with accounts of prominent personalities including former US president Barack Obama and Tesla CEO Elon Musk being hacked to post scam Bitcoin giveaways. While initial reports suggested that the scammers succeeded in defrauding victims of about $100,000 worth of Bitcoin, data from some of the world’s largest Bitcoin exchanges suggests that the scammers might have extracted a lot more than that.
The scammers used a well-known technique of promising high-value returns for low donations to attract victims. They hacked verified Twitter accounts of high-profile celebrities from billionaire philanthropist Bill Gates to Democratic presidential hopeful Joe Biden and posted similar messages on Wednesday evening inviting Twitter users to earn high rewards using Bitcoin. The accounts of major Bitcoin exchanges including Binance, Gemini, and blockchain news outlet CoinDesk were also affected.
Twitter temporarily prevented all verified users from tweeting and then blocked any tweet containing a Bitcoin address attached to it in order to stop users from falling prey to the scam. At the same time, Bitcoin exchanges blacklisted the wallet addresses being used by scammers to prevent users from sending out more money; effectively stopping the scam in its tracks.
Coinbase, one of the largest crypto exchanges in the world with over 35 million users has reported that the exchange stopped over 1100 transactions from Coinbase customers who were trying to send about 30.4 bitcoin ($280,000) to the scam. The exchange took notice of the scam minutes after Binance was targeted, and blacklisted the wallets to prevent further damage. About $3000 worth Bitcoin was sent by 14 Coinbase users before the blacklisting.
“It was a small group of Coinbase users that tried to send bitcoin to the scam address“, Philip Martin, Coinbase chief information security officer, said. He further added that the San-Francisco based exchange will often blacklist wallet addresses that are deemed fraudulent.
“This hack shows that security is about layers of protection,” said Jesse Powell, chief executive of Kraken. “The Twitter hack was a more widespread event, but scams of this nature are not new […] Like any other scam, we proactively blocked the addresses from the Twitter hack earlier this week”, he added.
Many prominent Bitcoin and crypto exchanges including Gemini and Binance, confirmed that they stopped funds from flowing into the hacker’s Bitcoin address. It is hard to estimate how much was sent before the blacklisting across exchanges took place. However, data on the number of attempted transactions post the blacklisting suggests that the bitcoins sent by victims amounted to a lot more than just $100,000.