What is Tiktok hardware wallet scam?
Those who bought what appears to be a “sealed brand new” hardware wallet advertised in the Chinese version of Tiktok were the victim of a $6.9 million crypto robbery, losing all their funds in minutes.
A late-night distress call to blockchain security company Slow Mist revealed one of 2025’s most devastating cryptocurrency thefts. Criminals are currently using security devices to protect users from online threats. It’s a sophisticated new threat of crypto fraud, and honestly, many users are worried about seeing hardware wallet tampering into a multi-million dollar criminal exploit.
Slowmist’s Chief Information Security Officer 23pds first reported the case. Unlike phishing emails, unsolicited messages, or famous scams using spoofing websites, this attack covers the security of victims at the hardware level.
The biggest problem with all of the crypto users is that there are minimal warning signs for this type of compromise until it’s too late.
How are counterfeit hardware wallets compromised?
The victim purchased what appears to be a legitimate ledger hardware wallet from Douyin Shop, an e-commerce platform within Tiktok’s Chinese social media version.
For security reasons, never buy a second-hand, uncrowded hardware wallet in case it is compromised. But in this case the buyer was fooled by the packaging. It looked like a factory sealed authentic product with original holographic stickers and professional finishes. For modest users, I was not surprised or different about this ledger wallet.
In this case, when the victim set up a new wallet, it worked perfectly fine, generating a normal random 24-word recovery phrase. Unfortunately, investigators will ultimately determine that this is the moment when the wallet was breached before it was sold.
In reality, the attacker had already pre-determined secret phrases or compromised the process of generating numbers. This gave me full access to the wallet and its private key. So when the funds were transferred to the wallet, the attacker was able to drain it immediately.
Unfortunately, the victim had deposited approximately 50 million yuan ($6.9 million) in his wallet address. However, within hours, the criminals emptied their wallets.
Did you know? The global hardware wallet market was valued at over $460 million in 2024 and is projected to grow to over $3 billion by 2033. This makes hardware wallets strongly trust users to be the primary target for Crypto theft.
Slow Mist Team Crypto Research Trail
As reported on the Slowmist X account, the victim filed an emergency report on the theft on June 13, 2025.
SlowMist is a blockchain security company that provides many services, including security audits and threat information, and is extensively functional in cryptocurrency crime investigations. The work often extends to large organizations and government agencies.
It was taken this opportunity to track the stolen funds and revealed that they had quickly poured out Huiwang, a shadowy Cambodia figure. The operation used a financial network called Huione Group, which operates a “node of cyber robbery laundry,” according to Financial Crime Enforcement Network or, according to Fincen.
Huiwang Crypto Laundering, coupled with multiple layers of mass obfuscation, is a popular economic move for criminals, making recovery virtually impossible as they are unable to know anti-money laundering (AML) or customer (KYC) controls. Thus, the Slow Mist was able to track stolen funds, but after the cold wallet key leak, there is little hope of recovery.
Did you know? Tiktok and similar social media platforms are hotbeds of crypto fraud. Scams range from fake investment opportunities, viral video scams, unsolicited messages and selling compromised hardware wallets. All of these are designed to doubt users from the crypto stash.
Crypto theft issues of growing sealed wallets
Cold Wallet Scams show how quickly you can lose an entire crypto stash in seconds. Slowmist’s chief security officer, 23pds, explained in X that crypto users should not gamble “all assets in a ‘wallet’ that hundreds of dollars cheaper.” He went on to say, “This isn’t saving money, it’s abandoning your lifeline.”
Such cases are part of a widespread surge in cryptocurrency-related scams that have plagued 2025. The first half of the year saw cryptocurrency losses of over $2.1 billion across infrastructure-level attacks.
Hardware wallet operations are another sophisticated vulnerability that crypto holders need to recognize. No matter how “legal” your wallet product appears, this case highlights the importance of purchasing new devices directly from your supplier. It is important to avoid other sources, especially discounts and market platforms.
Security experts have identified multiple ways that criminals can compromise their hardware wallets further.
- Firmware changes: The attacker replaces legitimate firmware with a malicious version that leaks private keys.
- Manual replacement: Criminals include fake setup steps that tell users to pre-generated addresses.
- Supply Chain Penetration: Wallets are intercepted and modified during transportation or retail distribution.
- Counterfeit Manufacturing: A complete fake device that mimics a legitimate hardware wallet.
Did you know? Even Coinbase, one of the world’s largest crypto companies, is susceptible to cyber attacks, and recently admitted that criminals have access to data used to trick people into handing over the crypto. The criminals demanded $20 million to keep it quiet, but they refused to pay and promised to refund those who had been scammed.
How to protect against hardware crypto wallet scams
The cryptocurrency industry, which exceeds $3 trillion, is an attractive target for criminals, especially hardware wallets. In particular, users trust these devices to store important funds for a long period of time.
This means that users need to take precautions to securely purchase crypto wallets.
- Packaging inconsistencies: Legitimate hardware wallet packages use ultrasonic welding in conjunction with tamper-proof seals. Devices held together with adhesive, missing external security packages, or pre-opened devices are the main red flags.
- Cheap pricing: Wallets below official retail prices may be counterfeiting or compromised, especially through social media platforms and informal channels.
- Pre-filled information: Wallets that come with preset pins, recovery phrases, or setup instructions must be destroyed immediately.
- Informal Markets and Retailers: Buying from anywhere other than the manufacturer’s official website will significantly increase the risk.
