Crypto User Loses $6.9M Through Compromised Cold Wallet Bought on Douyin

Cal Evans

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A crypto user has lost $6.9 million after purchasing a cold wallet from a third-party seller on Douyin, the Chinese version of TikTok. The wallet, though marketed as “factory sealed” and discounted, was pre-compromised — allowing attackers to drain the user’s funds within hours of activation. The case has sparked warnings from cybersecurity experts and blockchain analysts about the hidden dangers of bargain cold wallets.

The Trap of Fake Cold Wallets

The incident was disclosed by blockchain security firm SlowMist, which stated that the private key associated with the wallet had been compromised at the time of its creation. Within hours of transferring assets into the wallet, the victim saw their funds siphoned off.

Cybersecurity experts emphasized that cold wallets purchased from unreliable sources, especially those claiming discounts or factory seals, are often tampered with. These altered devices can be embedded with backdoors or malicious firmware that allows hackers to access private keys once activated.

A “Hot Trap” Disguised as a Secure Wallet

According to Hella, a former Bitmain employee familiar with the victim, the compromised wallet was described as a “carefully designed hot trap.” The stolen crypto was quickly routed through Huiwang — a shadowy network operated by Cambodia-based Huione Group. The conglomerate has been linked to illicit platforms including Huione Crypto and Haowang Guarantee, notorious for money laundering and dark web transactions.

Despite SlowMist’s effort to trace the stolen funds, Hella confirmed there’s “little hope of recovery.” The case underlines how sophisticated scammers exploit the growing demand for self-custody solutions in crypto.

Experts Warn: Don’t Cut Corners on Wallet Security

SlowMist’s chief information security officer, known as 23pds on X, warned users that buying cheaper hardware wallets from unauthorized sources is not saving money — it’s risking financial ruin. Because these wallets are distributed through third parties, sellers themselves may be unaware of the embedded vulnerabilities, making such scams harder to trace or prevent.

This incident serves as a stark warning for crypto investors: wallet security should never be compromised for the sake of cost. As more users seek self-custody, the market for tampered devices grows — and so do the risks. Ensuring wallets are purchased from official sources is no longer optional but essential.

Also Read: Crocodilus Malware : How Hackers Are Stealing Crypto Through Android Apps

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses

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