Criminals Steal $90 Million in Crypto via Tampered Ledger Hardware Wallets

Criminals have reportedly stolen between $90 million and $93 million in cryptocurrency by tampering with Ledger hardware wallets, according to the Financial Times. This theft involved unauthorized modifications made to devices sold through CryptoBilis, an authorized reseller in Southeast Asia.

The attack was executed by embedding microcontrollers into the hardware wallets, which captured sensitive information during the device setup. The stolen data included the crucial 24-word recovery phrases, which allow users to access their cryptocurrency. The compromised devices transmitted this information using LTE and eSIM technology, effectively bypassing the owner's computer and Wi-Fi.

Ledger has confirmed that at least one device was compromised and has advised customers who purchased from CryptoBilis within the last 90 days not to initialize their wallets. Tether, the issuer of the USDT stablecoin, has frozen USDT linked to the affected wallets, providing some level of protection for victims. However, funds in other cryptocurrencies remain vulnerable.

This incident highlights a significant vulnerability in the supply chain of hardware wallets. While these devices are designed to protect against external threats, tampering before purchase undermines their security. Ledger's response includes suspending sales through multiple resellers in Southeast Asia, as they investigate the extent of the compromised devices.

As the situation unfolds, users are advised to be cautious about the origins of their hardware wallets and to follow Ledger's guidance to avoid initializing potentially compromised devices.