Alexander Choi, the founder of crypto trading community Fortune Collective, has said that he lost $996k after being scammed in an advanced crypto scheme.
Choi said the incident occurred after he went on multiple video calls with people claiming to be involved with a project named SparkToken.
The wallet involved, linked to SparkToken SOL, has since been removed. Choi noted that there was no clear indication of a scam during the process, but soon after, his funds were withdrawn, and he had to wipe all of his devices and move all of his documents to one file.
He has now been able to characterize the experience as a “harsh wake-up call for the industry to increase security awareness.”
Choi Shares Emotional Account of the Hack
Choi expressed the emotional toll of losing nearly $1 million in a series of posts on X (formerly Twitter).
He explained that the theft happened while he was casually planning a trip with his boys, when out of the blue, his money disappeared from his wallet.
“One second I’m planning a trip and the next a million is ripped from my hands,” he wrote, adding that it felt more like a robbery than a bad trading loss.Â
Choi said he was in shock but ultimately admitted that he could’ve done a lot more research and taken better care of his finances, and acknowledged the mistakes that left him open to the scam.
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Security Lessons and Warnings to the Community
Choi remarked that the biggest takeaway from his situation was to be skeptical and protect oneself in the crypto space.
If he could give one piece of advice, it would be to not join a third-party call on Zoom, Google Meet, Microsoft Teams, etc. with unknown individuals, as he explained, social engineering is one of the greatest risks to crypto holders.
He also commented on needing to improve wallet management, adding that he would not be keeping excess capital exposed to online/hot wallets.
Most importantly, Choi assured followers that the stolen amount was not all of his net worth, maintaining most of his wealth in cold storage and fiat.
Also Read: Arcadia Finance Suffers Major Crypto Hack Resulting in a Loss of $2.5 Million
Broader Trends in Crypto-Related Scams
Choi’s case fits into the wider pattern of an uptick in crypto-related scams, many of which have elevated their sophistication, often employing artificial intelligence and social engineering techniques.
UnoCrypto reported on September 3rd that cybercriminals are running voice phishing scams with earnings of up to $20,000 per month, and in the increasingly common event, cybercriminals are using deepfakes of executives.
These voice phishing scams are usually created by professional callers who are hired through underground forums, which makes them harder to detect.
Experts have warned that AI-driven schemes are becoming more sophisticated, and as criminal activities grow in complexity, there are new vulnerabilities for individuals and firms operating in the crypto space.
Growing Financial Impact of Crypto Hacks
The financial burden of crypto hacks continues to increase and denotes a need for much stronger protections throughout the ecosystem.
Hacks related to crypto caused approximately $163 million in losses during the month of August, representing an increase of 15% from July, according to UnoCrypto.
The bulk of losses were due to major hacks, such as the BTCTurk hack, and other exploits within DeFi, which diminished investor trust in the security of cryptocurrency.
Choi’s loss of nearly $1 million would now be classified as one of many high-profile incidents, and reiterates that even those who have operated within the crypto space for a long time are not shielded from risk.
Choi’s message to the community was a simple one: “Stay paranoid, protect your size, and do your research because if it happens to me, it can happen to anyone.”