- A crypto CEO lost $450,000 to his “best friend” after connecting to the friend’s WiFi network, in a case of “proximity breach” scam.
- The scammer exploited the WiFi connection to gain control of the CEO’s device and drain his crypto wallet after the CEO sold his stake in a company for $500,000.
- Anti-money laundering firm AMLBot was able to track down and freeze $380,000 of the stolen funds on a crypto exchange, with the scammer agreeing to pay back the remaining $70,000 over time.
Recently, a crypto CEO lost $450K after connecting to a compromised WiFi network owned by someone he thought was his best friend. This type of scam, known as a “proximity breach,” is a rising trend where thieves exploit relationships to steal money.
The Exploit
The victim, who goes by the name Tom, had recently left a crypto company after selling his stake for $500K. One night during a rainstorm, Tom’s phone was damaged by water. After getting it working again and re-entering his seed phrase, he realized his life savings were gone.
The Investigation
Tom contacted anti-money laundering firm AMLBot for help tracking down the stolen funds. AMLBot was able to trace the money to a Binance account. By investigating Tom’s activities leading up to the theft, AMLBot determined the funds were stolen by Tom’s “best friend” after he connected to the friend’s WiFi network.
The Confrontation
AMLBot made contact with the scammer posing as a potential real estate investor. After threatening to go to the police, the scammer confessed to stealing Tom’s money within 15-20 minutes. $380K of the original $450K had already been spent.
Proximity Breach Scams
This type of scam is part of a growing trend called “proximity breaches” where thieves take advantage of close relationships. AMLBot has recorded 7 similar cases in the past 3 months. For example, a victim’s girlfriend stole 13 BTC and a brother stole $300K.
Takeaways
- Never access crypto accounts on public WiFi networks
- Enable transaction notifications to detect unauthorized activity quickly
- Privacy coins and exchanges can make recovery difficult
- Maintain vigilance even with people close to you
By improving his security practices, Tom could have avoided falling victim to this devastating betrayal of trust. The crypto world still has many lurking threats, even from those we hold nearest.
