Crypto Wallet Founder Loses $125,000 stETH in Fake Airdrop Scam

Published: Jan 2, 2024
Written By:
Vignesh Karunanidhi
Milk Road Writer

Bill Lou, the co-founder of the crypto wallet startup called Nest, revealed in an emotional tweet that he fell victim to an airdrop impersonation scam. The phishing scam resulted in the loss of $125,000 worth of stETH. The fraud raises renewed questions about crypto’s persistent scams and security gaps, even for industry insiders.

Key details:

  • Lou followed fake instructions while attempting to claim a deceptive “LFG” token airdrop.
  • He signed a malicious message with his wallet private key, granting the scammer access.
  • Lou admitted his greed to chase a midnight airdrop overrode better judgement.
  • The scam utilized a sophisticated fake site and Twitter accounts impersonating the real LFG DAO
https://twitter.com/BillLou95/status/1742098683133612370?s=20

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Brutal Lesson for a Crypto Wallet Founder

As the founder of a crypto wallet platform aiming to boost protections for users, Lou expressed anguish that he ignored warning signs: “I can’t believe this is happening; I’ve always been so careful.”

He blamed fatigue and greed for chasing an airdrop late at night rather than “going to sleep” for letting his guard down. Lou also admitted using the popular Metamask browser wallet instead of his own more secure Nest Wallet product. Lou ended his tweet by fuming and cussing about his stupidity and MetaMask.

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Fake airdrops are a persistent crypto scam tactic, offering free tokens if users connect their wallet and sign malicious payloads granting asset access. The LFG X account itself warned followers of impersonators utilizing deceptive X accounts and websites. Scammers steal legitimacy by mimicking the names of real protocols.

Lou’s high profile in the crypto sector makes the $125,000 hit even more glaring. It highlights that even experts can make significant mistakes by failing to identify and avoid fraud. For new users in particular, crypto remains a minefield where simple errors carry steep consequences.

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.