Fake Bitcoin Gold Wallet Scammed Users, Steals $3.3 Million in Total

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In a surprising turn of events, a fake BTG wallet that went by the name of “mybtgwallet” was reported as fraudulent. Promoted on the Bitcoin Gold website, the fake wallet scammed innocent users before the developers were able to take it down. With the issue coming to a light, it has been reported that the total amount of digital currency lost totals up to about $3.3 million.

Fool’s gold

There was also a website that contained a fake wallet that prompted users to give away their private keys in exchange for “free bitcoin gold”. The website has since been purged to stop any more fraudulent activities.

With the BTG team tweeting links to the wallet, it was no surprise that a large number of people got fooled by the scam. Because of this, some murmurs were thrown around, saying that there might be a conspiracy behind the heist, raising questions about the BTG team’s diligence and the developer’s obligations with the software.

In addition, it was also reported that the altcoin Verge also had coins stolen from iOS wallet Coinpouch, worth over $7 million. This raises the question of whether developers should first make sure that any third-party wallet does not have any malicious code before it gets promoted on any of their websites. What’s more, an average digital currency user normally does not have the knowledge to check if the software is not malignant, and at the end of the day, it’s the developers’ obligation to make sure anything they promote is safe to use.

The BTG team is also being scrutinized for acting slow once the scam was revealed, with one of their team member saying:

“Preliminary investigations indicated that at least some of the claims of theft by the mybtgwallet site are reliable”

Now that the scam is over, it appears that those claims are correct. In summation, the fake wallet was able to take $107,000 of Bitcoin gold, $3 million of Bitcoin, $72,000 of Litecoin, and $30,000 of Ethereum. The developer, who is still unknown, even went to great lengths to pull off the scam. Supposedly, the wallet was open source, but the code used was later changed on Github, allowing users’ private keys to be sent straight to the scammer.

In a statement by the Bitcoin Gold team, they said:

“The team is working with security experts to get to the bottom of this issue…[we] will continue to cooperate in every way possible and work tirelessly in hopes of getting to the root of what happened.

The BTG team are expected to provide a further update in the coming days.”

All that glitters is not always gold

The birth of Bitcoin Cash is starting to look like a perfect example of how to fork a coin with every occurring fork. And with the Bitcoin Diamond (BTD) fork estimated to drop around the last week of November, Bitcoin holders face two choices: get their BTD, or ignore the fork and play it safe. There is still a third option however, which is sending their Bitcoin to an exchange that’ll support Bitcoin Diamond and pay out the coins. Still, placing your faith on centralized exchanges still poses some risks of its own, and it’s up to the user to make a decision.

Regardless of any negative publicity that is currently circling BTG, the digital currency’s price still rose sharply this week, along with Bitcoin Cash.