A warning has been issued by cryptocurrency experts regarding a rise in scams targeting forgotten bitcoin wallets. The scammers are exploiting a loophole in the system to access and drain the funds from abandoned wallets.
According to a report by the blockchain security firm, Chainalysis, over 20,000 bitcoin wallets have been compromised in the past year alone, resulting in losses estimated to be around £1.2 billion.
The scammers are using a technique known as 'chain analysis' to track down and drain forgotten wallets. This involves tracing the flow of cryptocurrency on the blockchain to identify and locate abandoned funds.
Experts are urging users to take immediate action to secure their digital assets and prevent falling victim to these scams. This includes using strong passwords, enabling two-factor authentication, and regularly backing up their wallets.
The UK's Financial Conduct Authority (FCA) has warned that cryptocurrency investors should be cautious and do their research before investing. They also recommend using reputable exchanges and wallet providers to store and manage digital assets.
Users who believe they may have fallen victim to a scam are advised to contact Action Fraud, the UK's national reporting centre for fraud and cybercrime, immediately.