Yesterday, I found out someone stole 20K+ USD from me.
It happened 17 months ago, on Oct 2nd, 2020. Someone I had never met was able to reach into my “offline cold hardware wallet,” which was advertised to be the most secured wallet for your crypto assets.
Back in 2018 July, after I wrote the following tweets, I bought 0.84 bitcoin at a $7300 price tag. This time I decide to keep the fund off the exchange. I stored all the bitcoin in a ledger and decided to forget about it. Until May 2020, after the price went up to above 9K per bitcoin, I spent $1500 worth on Newegg for a 2080TI GPU while working on the Minecraft Concert project Mad Zoo Events (which was later incorporated as Parrot Gang).
Obviously, I was right again about the bitcoin, and the price went up above 70K USD per bitcoin with a 10X return. When it comes to the time cashing out, I plugged in my Ledger after “safely” storing in my underwear drawer for 17 months. After typing in my pin code on Ledger using a 2-button interface, I see the balance went straight to 0 in the dashboard. It was a trippy moment when you see your “digital money” vanished in front of your eyes, rolling to “0.00”. Like it was never there. However, the blockchain recorded at least I used to own it.
How did this happen? I asked myself. Obviously, I did not understand bitcoin well enough. I was not careful with my seed keys since I digitally saved them in my Evernote. I can only imagine that somehow, there were targeted attacks on my Evernote stored in the cloud, and the hacker was able to find my safe code. I researched breaching news and found out Ledger leaked their customers’ information in July 2020 , basically putting a target on every email address. Anyone having a cold wallet is a crypto user and likely to carry a larger balance in their wallet. Even though all my passwords are not identical, putting me at much less risk of a library matching attack, somehow, someone still got access to the only digital copy of the safe key I had in my Evernote.
Either way, I did not keep the seed word properly. I was not educated enough to learn how to use crypto securely, but how many crypto users are equipped with such knowledge? Using a cold hardware wallet increased my risk instead of lowering it. It made me realize how shockingly vulnerable we are in cyber security with today’s tech abundance. I can’t remember how many scams calls, emails I got spammed on a daily basis. How many fraudulent charges have I had to dispute in the past 10 years. I got stolen money from some random ATM machine I never visited with a debit card I never lost. My business had tens of thousands got cashed from a fake check. Now I lost over 20K in crypto which I thought was completely secured.
Now, I can say my third crypto trade story comes to an end. It was depressing not able to pocket the earnings I thought I always had. But knowing the fact that it happed 17 months ago made the whole situation feel less realistic.
Not sure how long it takes for the public to adopt the cryptocurrency, or ever would be in the near future. But at least, I am done with it for now. I can’t see any value of Crypto besides Tax evasion, or illegal business. The fact that crypto is so vulnerable to hacking made it almost impossible to mass adoption with existing technologies.
I will follow up this case with Ledger and see what they can find out. Just curious what is the legal and tax implication of such digital theft.