Fake Investors Hacked $4M Worth of Crypto from Webverse Founders

As cryptocurrencies are becoming more common with time

new scams related to crypto assets are frequently making headlines. 

This time, the victim of a four million crypto scam is not a novice crypto trader but the co-founder of leading blockchain applications. 

As per the latest updates from Twitter, Ahad Shams, co-founder of Webverse tweeted about losing $4 million worth of cryptocurrencies in a crypto scam in a hotel lobby in Rome. Webverse is a Web 3.0 game engine that enables digital creators to build their own metaverse. The entire scam unfolded in an extremely unsuspicious manner and even the investigators are not being able to trace back the exploited loophole in during the scam.

A Meeting in Rome

Webverse founders shared a detailed note on their Twitter, giving the details of the entire incident. According to Ahad Shams, they were in contact with an investor named Mr. Safra, who was particularly inclined towards investing in exciting Web 3.0 projects. After weeks of discussions about the investments, Mr. Safra asked the co-founders to meet him in real life to seal the deal as he has been cheated before in the name of crypto investments. After that, co-founders also have to share their official IDs in the name of KYC before leaving for Rome. 

Ahad Shams along with his other co-founder had to fly to Rome to meet Mr. Safra and once the meeting was completed. The meeting was scheduled in a hotel lobby with Mr. Saraf and his professional banker. Ahad was also asked to bring the required ‘proof-of-funds’ of the projects which he created using a new Trust Wallet account to ensure that this proof-of-funds remains isolated from the rest of their accounts. 

“When we met, we sat across from these three men and transferred 4m USDC into the Trust Wallet. ‘Mr. Safra’ asked to see the balances on the Trust Wallet app and took out his phone to ‘take some pictures’.”

Trusting his potential investor, Ahad was comfortable sharing the device with Mr. Safra of which he took some photos. After taking the photos, Mr. Safra excused himself for some time to discuss the financial details with his banking associate. 

The Webverse co-founder went on to wait for a while but soon realized that Mr. Safra is not coming back. Right then they checked their Trust Wallet which had no funds whatsoever. Both of them rushed to report the scam to local authorities and filed an Internet Crime Complaint with the FBI. 

Investigators have mentioned that they have no idea how the scam was conducted and how the scammers were able to move funds out of the trust wallet. Presently they are working with Trust wallet to understand the trigger point of that particular transaction and understand how scammers made the transaction happen. 

“The interim update from the ongoing investigations is that we are still unable to confidently establish the attack vector. The investigators have reviewed the available evidence and engaged in lengthy interviews with the relevant persons but further technical information is necessary for them to come to confidently establish conclusions.”

The point here to note is that the entire scam happened without any leak of private keys. This is beyond our understanding how the scammers have been able to move the funds out of the Trust wallet without private keys. This investigation could reveal significant details about the functioning of crypto security and the functioning of crypto wallets.