Recent analysis from Lookonchain revealed a series of crypto asset theft incidents affecting buyers of Ledger hardware wallets from a third-party reseller named CryptoBillis. Total combined losses from victims using devices from this source are estimated to approach $90 million. That figure accumulated from buyers transferring assets to devices they believed to be secure vaults, unaware that their keys had already been duplicated prior to shipment.
Vanished Within Hours
One of the clearest traces of theft was seen in a report from wallet owner TY24Ya. This user deposited 7 million USDT onto a Ledger device purchased just three weeks earlier from CryptoBillis. Instead of remaining safe, the entire funds vanished without a trace just hours after the initial deposit.
Another victim lost their entire long-term holdings of 80 Bitcoin - worth $5.2 million - after transferring them to a unit from this reseller. Tracking data indicates the dozens of Bitcoin were accumulated gradually at an average price of $65,000 per coin, only to be wiped clean once moved to the new wallet.
Risks of Buying Outside Official Channels
Responding to this hacking pattern, the crypto security community reiterated the high risks of using cold storage devices not purchased directly from the manufacturer’s official store. Intermediary distribution channels often open opportunities for third parties to unbox and tamper with contents undetected.
Attack methods vary. Perpetrators can inject malicious code through firmware-level manipulation on the device’s built-in system. Other forms of fraud target the user directly, such as slipping a card with a pre-configured seed phrase into the packaging disguised as an official guide. Once buyers transfer coins to those pre-set addresses, attackers simply use their copy of the backup key to drain the wallet remotely.
This supply chain attack pattern highlights the real-world limits of security hardware. Even the strongest cryptographic system collapses immediately if the storage hardware is compromised en route to the consumer.
Reported by @lookonchain on X.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
