$8 Million in Cryptocurrency Ethereum Stolen from Freewallet. Scam or Hack?

in ethereum •  last year

Plenty of cryptocurrency enthusiasts have come across the FreeWallet.org platform at some point. This is especially true when people are looking for a mobile wallet supporting a specific cryptocurrency. For the longest time, there appeared to be no issue with FreeWallet, but that situation has come to change.

WHAT IS GOING ON WITH FREEWALLET.ORG?

It is a bit unclear as to what has happened with Freewallet.org all of a sudden. Cryptocurrency users are well aware of the dangers associated with using an online wallet platform. They are never in full control of their private keys and rely on the service operators to retain access to money. Sooner or later, all of these online wallets will either disappear or turn into a scam. It appears the latter has happened where FreeWallet.org is concerned.

To be more specific, the platform is currently liquidating all user wallets and taking the money for themselves. Several thousand Ether has been lost in the process. Other cryptocurrencies may be affected as well, even though no official number have been provided at this time. The platform supports Bitcoin, Ethereum, Monero, and Dash, along with another dozen or so different currencies and assets. A lot of those currencies never had a proper mobile wallet developed, thus FreeWallet made a lot of sense in this regard.

To put this news into perspective, the wallets are being drained in a somewhat ingenious way. Every transaction conducted through the service will have the recipient address changed to an unknown address. Once the user sends the money, their funds will be lost. It is certainly possible the service has been hijacked by an unknown third party, although many people suspect that is not the case. Only time will tell who is responsible for these thefts, that much is evident.

All of this goes to show there are still a lot of problems associated with third-party wallet services. Many of such service providers have turned into scammers over the years. Some wallet services have even shut down out of the blue and took all of the user funds with it. Whatever is happening to FreeWallet seems to be a deliberate plan, albeit no one knows for sure who is pulling the strings right now.

It is only a matter of time until the mobile Freewallet applications for different currencies will be removed from the App Stores, though. Cryptocurrency users need to contact Apple and Google to have these applications removed as soon as possible due to this malicious activity. Until that happens, a lot of people will see their money stolen. Freewallet is the number one result for “coin” mobile wallet searches in these app stores. Reporting this development to Google and Apple will ensure others will not lose their cryptocurrency holdings.

Even if this turns out to be a hack, it is highly unlikely FreeWallet will be able to reimburse its users. Millions of dollars worth of coins have been stolen so far, and it is possible the total tally will be much higher when everything’s said and done. It is evident people need to stick to officially endorse wallets, and not trust search results popping up randomly. One of the company’s representatives posted a brief message on Reddit, which doesn’t explain the situation whatsoever: https://www.reddit.com/r/CryptoCurrency/comments/6gtrmd/freewalletorg_scam_millions_stolen/?st=J3XKV1EF&sh=5b259022

In case you're interested, you can take a look at the Ethereum address where all of this value is being redirected right here:
https://etherscan.io/address/0x11b85b4e2fadaebe04a251377aa35b9be3c785f0

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