A counterfeit cold wallet bought via Douyin led to the theft of 50 million yuan in crypto assets within hours.
The incident reveals a booming gray market of fake cold wallets, exploiting user trust and weak supply chain security.
Experts urge investors to buy only from official sources and follow strict security practices to protect digital assets.
INTRODUCTION: A COSTLY SECURITY CRISIS
In 2025, a case that shocked the cryptocurrency industry drew widespread attention: an investor had 50 million yuan worth of crypto assets stolen from a cold wallet within just a few hours.
According to 23pds, the Chief Information Security Officer (CISO) of blockchain security firm SlowMist, the tragedy stemmed from a cold wallet the victim purchased via the Chinese social platform Douyin.
This wallet, marketed as brand-new and sealed, had its private keys compromised during initialization, leading to the swift theft and laundering of funds through the offshore platform “Huiwang.” Recovery seemed virtually impossible.
Cold wallets have long been considered digital fortresses for securing crypto assets. However, this incident exposed critical vulnerabilities in both the supply chain and usage practices.
It was not just a personal financial catastrophe—it served as a wake-up call for the entire crypto ecosystem.
This article dives deep into the case, exposes the underbelly of the cold wallet market, analyzes systemic security flaws, and offers practical strategies for investors to safeguard their digital wealth.
CASE RECONSTRUCTION: FROM TRUST TO CATASTROPHE IN HOURS
The origin of this case appears simple, but it was a meticulously crafted trap. The victim was drawn in by an ad on Douyin for a “brand-new, sealed” cold wallet, offered at just a third of the official price.
The packaging looked authentic, and it even came with what appeared to be “official certification.” Lured by the low price and a blind trust in cold wallet technology, the investor quickly made the purchase.
Upon receiving the wallet, he followed the included instructions to initialize the device and generate a private key. Then he transferred his 50 million yuan worth of assets into it. Unbeknownst to him, the firmware had been preloaded with malicious code.
The private key was transmitted to the attacker the moment it was generated. Within hours, the stolen assets were routed through several intermediary addresses and laundered via the “Huiwang” platform—disappearing into the digital abyss.
Though technically simple, the attack was devastatingly effective. The hacker exploited the investor’s misplaced trust and disregard for secure sourcing, striking at the weakest link in the security chain—the supply chain.
The entire process unfolded like a textbook cybercrime case and exposed the myth that cold wallets are impenetrable. Worryingly, this was not an isolated incident but just the tip of the iceberg in an emerging wave of counterfeit cold wallet scams.
THE DARK SIDE OF THE COLD WALLET MARKET: RISE OF A GRAY INDUSTRY
Cold wallets (hardware wallets), known for their offline private key storage, are widely regarded as the safest way to store crypto.
Brands like Ledger and Trezor dominate the market thanks to their solid reputations. However, their high prices and complex purchasing processes have pushed many novice investors to seek cheaper alternatives—opening the door to fraud.
A shadow industry built around counterfeit cold wallets has quietly emerged, thriving particularly on short-video platforms like Douyin and Kuaishou. As 23pds bluntly warned, “99% of ‘brand-new’ or ‘flash-sale’ cold wallets online are fake,” and often part of elaborate scams.
These fake wallets are crafted with extreme cunning. Fraudsters mimic genuine packaging, anti-counterfeit labels, and manuals to create near-perfect replicas.
Some come preloaded with fixed private keys—what looks like a new key generated during setup is already in the hacker’s hands. Others contain malicious firmware that secretly transmits private keys via hidden network features.
Even the second-hand wallet market is riddled with danger: scammers refurbish used devices with backdoored firmware and resell them as “new.”
Short-video platforms provide fertile ground for these scams, with low-price bait, fake review videos, and fabricated customer feedback creating an illusion of trust.
The victims are often crypto newbies, unaware that cold wallets are only secure when the entire supply chain and usage process is trustworthy.
COLD WALLET SECURITY RISKS: A TEST OF TECHNOLOGY AND HUMAN BEHAVIOR
The security of cold wallets hinges on the integrity of private key generation, storage, and usage—but every step is a potential point of failure. Private key generation is especially critical, yet counterfeit wallets often use weak random number generators or fixed keys.
Hackers might embed low-entropy algorithms into firmware to make key generation predictable—or hard-code keys outright, controlling every move the user makes.
Even more alarming, some fake wallets pretend to be offline devices but secretly connect to networks via USB or hidden communication modules, sending private keys in real time to attackers.
Supply chain attacks are another serious concern. From manufacturing to shipping to retail, every link can be infiltrated. Genuine wallets may be swapped with fakes during transit, tamper-evident seals compromised, or even manipulated during production.
In 2020, Ledger suffered a database breach exposing customer information—though it didn’t directly lead to asset losses, it underscored the fragility of supply chain security.
User behavior is an equally critical factor. Even with legitimate wallets, careless handling can spell disaster. Many users photograph or upload seed phrases to cloud storage, making them easy targets.
Others fall for fake websites, downloading malicious firmware or entering keys into phishing pages. Even the physical storage of seed phrases poses risks if stolen or lost. These technological and human vulnerabilities combine to create a double-edged threat.
PROTECTION STRATEGIES: HOW TO SECURE YOUR CRYPTO ASSETS
Faced with a murky cold wallet market and growing threats, investors must take proactive steps to protect their assets:
Buy from official sources. Only purchase from brand websites like Ledger or Trezor or from their authorized resellers. Avoid deals on video platforms or third-party e-commerce sellers. They’re often scams.
Verify device integrity. Upon receipt, inspect anti-tampering labels and verify the device serial number on the official website. Check that firmware has not been altered.
Never buy second-hand wallets. Even seemingly “new” devices may have been backdoored.
Secure initialization. Set up the wallet in a fully offline environment. After setup, use manufacturer-provided tools to verify the firmware is authentic and up to date.
Test for randomness. Re-initialize the wallet multiple times to check for consistent seed generation patterns that may indicate manipulation.
Protect your seed phrases. Write them down on paper or etch into a metal plate, and store them in a secure physical location. Never upload or save them on connected devices. Consider splitting the phrase and storing parts separately to avoid single points of failure.
Watch out for phishing. Only trust links from verified sources. Avoid downloading firmware or entering private keys on unverified platforms. If in doubt, assume it’s a scam.
Stay informed. Follow cybersecurity firms like SlowMist or CertiK to keep up with new threats and best practices.
CONCLUSION: SECURITY AWARENESS IS THE BEST “COLD WALLET”
This 50-million-yuan heist was not just a personal tragedy—it was a sharp warning to all crypto investors. Cold wallets are not invulnerable fortresses; their safety depends on a secure supply chain, trusted firmware, and user vigilance.
The rise of counterfeit cold wallets and increasingly sophisticated attacks have put investors at unprecedented risk.
In the race for crypto wealth, awareness and education are the real “cold wallets.” By purchasing from trusted sources, handling private keys with care, and maintaining constant vigilance, investors can protect their assets in an increasingly hostile digital environment.
As 23pds aptly warned: “99% of ‘discounted’ cold wallets are traps.” Only caution and knowledge can prevent you from becoming the next victim of a multimillion-dollar disaster.
〈The Trap of Cold Wallets — Lessons from a 50-Million-Yuan Cryptocurrency Theft〉這篇文章最早發佈於《CoinRank》。
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
The Trap of Cold Wallets — Lessons from a 50-Million-Yuan Cryptocurrency Theft
A counterfeit cold wallet bought via Douyin led to the theft of 50 million yuan in crypto assets within hours.
The incident reveals a booming gray market of fake cold wallets, exploiting user trust and weak supply chain security.
Experts urge investors to buy only from official sources and follow strict security practices to protect digital assets.
INTRODUCTION: A COSTLY SECURITY CRISIS
In 2025, a case that shocked the cryptocurrency industry drew widespread attention: an investor had 50 million yuan worth of crypto assets stolen from a cold wallet within just a few hours.
According to 23pds, the Chief Information Security Officer (CISO) of blockchain security firm SlowMist, the tragedy stemmed from a cold wallet the victim purchased via the Chinese social platform Douyin.
This wallet, marketed as brand-new and sealed, had its private keys compromised during initialization, leading to the swift theft and laundering of funds through the offshore platform “Huiwang.” Recovery seemed virtually impossible.
Cold wallets have long been considered digital fortresses for securing crypto assets. However, this incident exposed critical vulnerabilities in both the supply chain and usage practices.
It was not just a personal financial catastrophe—it served as a wake-up call for the entire crypto ecosystem.
This article dives deep into the case, exposes the underbelly of the cold wallet market, analyzes systemic security flaws, and offers practical strategies for investors to safeguard their digital wealth.
CASE RECONSTRUCTION: FROM TRUST TO CATASTROPHE IN HOURS
The origin of this case appears simple, but it was a meticulously crafted trap. The victim was drawn in by an ad on Douyin for a “brand-new, sealed” cold wallet, offered at just a third of the official price.
The packaging looked authentic, and it even came with what appeared to be “official certification.” Lured by the low price and a blind trust in cold wallet technology, the investor quickly made the purchase.
Upon receiving the wallet, he followed the included instructions to initialize the device and generate a private key. Then he transferred his 50 million yuan worth of assets into it. Unbeknownst to him, the firmware had been preloaded with malicious code.
The private key was transmitted to the attacker the moment it was generated. Within hours, the stolen assets were routed through several intermediary addresses and laundered via the “Huiwang” platform—disappearing into the digital abyss.
Though technically simple, the attack was devastatingly effective. The hacker exploited the investor’s misplaced trust and disregard for secure sourcing, striking at the weakest link in the security chain—the supply chain.
The entire process unfolded like a textbook cybercrime case and exposed the myth that cold wallets are impenetrable. Worryingly, this was not an isolated incident but just the tip of the iceberg in an emerging wave of counterfeit cold wallet scams.
THE DARK SIDE OF THE COLD WALLET MARKET: RISE OF A GRAY INDUSTRY
Cold wallets (hardware wallets), known for their offline private key storage, are widely regarded as the safest way to store crypto.
Brands like Ledger and Trezor dominate the market thanks to their solid reputations. However, their high prices and complex purchasing processes have pushed many novice investors to seek cheaper alternatives—opening the door to fraud.
A shadow industry built around counterfeit cold wallets has quietly emerged, thriving particularly on short-video platforms like Douyin and Kuaishou. As 23pds bluntly warned, “99% of ‘brand-new’ or ‘flash-sale’ cold wallets online are fake,” and often part of elaborate scams.
These fake wallets are crafted with extreme cunning. Fraudsters mimic genuine packaging, anti-counterfeit labels, and manuals to create near-perfect replicas.
Some come preloaded with fixed private keys—what looks like a new key generated during setup is already in the hacker’s hands. Others contain malicious firmware that secretly transmits private keys via hidden network features.
Even the second-hand wallet market is riddled with danger: scammers refurbish used devices with backdoored firmware and resell them as “new.”
Short-video platforms provide fertile ground for these scams, with low-price bait, fake review videos, and fabricated customer feedback creating an illusion of trust.
The victims are often crypto newbies, unaware that cold wallets are only secure when the entire supply chain and usage process is trustworthy.
COLD WALLET SECURITY RISKS: A TEST OF TECHNOLOGY AND HUMAN BEHAVIOR
The security of cold wallets hinges on the integrity of private key generation, storage, and usage—but every step is a potential point of failure. Private key generation is especially critical, yet counterfeit wallets often use weak random number generators or fixed keys.
Hackers might embed low-entropy algorithms into firmware to make key generation predictable—or hard-code keys outright, controlling every move the user makes.
Even more alarming, some fake wallets pretend to be offline devices but secretly connect to networks via USB or hidden communication modules, sending private keys in real time to attackers.
Supply chain attacks are another serious concern. From manufacturing to shipping to retail, every link can be infiltrated. Genuine wallets may be swapped with fakes during transit, tamper-evident seals compromised, or even manipulated during production.
In 2020, Ledger suffered a database breach exposing customer information—though it didn’t directly lead to asset losses, it underscored the fragility of supply chain security.
User behavior is an equally critical factor. Even with legitimate wallets, careless handling can spell disaster. Many users photograph or upload seed phrases to cloud storage, making them easy targets.
Others fall for fake websites, downloading malicious firmware or entering keys into phishing pages. Even the physical storage of seed phrases poses risks if stolen or lost. These technological and human vulnerabilities combine to create a double-edged threat.
PROTECTION STRATEGIES: HOW TO SECURE YOUR CRYPTO ASSETS
Faced with a murky cold wallet market and growing threats, investors must take proactive steps to protect their assets:
Buy from official sources. Only purchase from brand websites like Ledger or Trezor or from their authorized resellers. Avoid deals on video platforms or third-party e-commerce sellers. They’re often scams.
Verify device integrity. Upon receipt, inspect anti-tampering labels and verify the device serial number on the official website. Check that firmware has not been altered.
Never buy second-hand wallets. Even seemingly “new” devices may have been backdoored.
Secure initialization. Set up the wallet in a fully offline environment. After setup, use manufacturer-provided tools to verify the firmware is authentic and up to date.
Test for randomness. Re-initialize the wallet multiple times to check for consistent seed generation patterns that may indicate manipulation.
Protect your seed phrases. Write them down on paper or etch into a metal plate, and store them in a secure physical location. Never upload or save them on connected devices. Consider splitting the phrase and storing parts separately to avoid single points of failure.
Watch out for phishing. Only trust links from verified sources. Avoid downloading firmware or entering private keys on unverified platforms. If in doubt, assume it’s a scam.
Stay informed. Follow cybersecurity firms like SlowMist or CertiK to keep up with new threats and best practices.
CONCLUSION: SECURITY AWARENESS IS THE BEST “COLD WALLET”
This 50-million-yuan heist was not just a personal tragedy—it was a sharp warning to all crypto investors. Cold wallets are not invulnerable fortresses; their safety depends on a secure supply chain, trusted firmware, and user vigilance.
The rise of counterfeit cold wallets and increasingly sophisticated attacks have put investors at unprecedented risk.
In the race for crypto wealth, awareness and education are the real “cold wallets.” By purchasing from trusted sources, handling private keys with care, and maintaining constant vigilance, investors can protect their assets in an increasingly hostile digital environment.
As 23pds aptly warned: “99% of ‘discounted’ cold wallets are traps.” Only caution and knowledge can prevent you from becoming the next victim of a multimillion-dollar disaster.
〈The Trap of Cold Wallets — Lessons from a 50-Million-Yuan Cryptocurrency Theft〉這篇文章最早發佈於《CoinRank》。