A mature "hunting chain" has quietly taken shape, and the manufacturers' perfect verification mechanisms and users' security awareness urgently need to be closed.
Written by Web3 Farmer Frank
Imagine you are a patient holder who has weathered a long bear market and finally withdrawn your hard-earned BTC from a CEX into your newly purchased hardware wallet, feeling the peace of mind that your assets are firmly in your hands.
Two hours later, you open the app and your wallet is empty.
This is not a hypothesis, but a real incident that just happened: an investor bought a hardware wallet on JD.com and deposited 4.35 BTC he had saved. Little did he know that the device had already been initialized in advance by the scammers, generating mnemonics and inserting fake instructions to guide the user to link to the mobile app according to the trap process.
In other words, the moment a user activates their wallet, it already belongs to the hacker.
Unfortunately, this is not an isolated case. Recently, there have been a number of cases in which people have been defrauded or even had their assets wiped out after purchasing hardware wallets on e-commerce platforms such as Douyin, JD.com, and Amazon. If we carefully analyze similar recent security incidents, we will find that a mature "hunting chain" operating around the hardware wallet sales link is quietly taking shape.
1. The "second-hand" gray chain that hunts Xiaobai
Hardware wallets are devices that generate private keys in a "completely offline environment". In theory, as long as the mnemonic phrases are properly backed up, the security level for daily use is almost the ceiling. This is also the popular science term that most Web3 players are exposed to on a daily basis.
However, the real risk is often not in the device itself, but in the purchase and activation process.
Under long-term publicity, many investors easily form a simple cognitive formula: "Hardware wallet = absolute security". This psychological suggestion makes many people ignore several key prerequisites after obtaining the device:
Whether the device packaging is complete and whether the seal is abnormal; whether the mnemonic phrase must be generated by oneself; whether the activation information is verified as "first use"... Therefore, many users can't wait to transfer assets as soon as they get the hardware wallet device, unknowingly giving scammers an opportunity to take advantage.
Whether it was the previous incident where TikTok purchased a hardware wallet and 50 million in crypto assets were looted, or the latest incident where JD.com purchased imKey hardware and caused BTC to be cleared, without exception, all problems occurred during the purchase and activation process.
The sale of hardware wallets on domestic e-commerce platforms has already formed a mature gray industry chain.
In theory, China has always maintained a high-pressure stance on cryptocurrencies. As early as 2014, e-commerce platforms directly banned the sale of cryptocurrencies. On September 4, 2017, the People's Bank of China and seven other ministries and commissions jointly issued an announcement (On Preventing the Risks of Token Issuance and Financing), which explicitly required domestic platforms not to provide trading, exchange, pricing, intermediary and other services involving cryptocurrencies.
From the literal meaning, "intermediary services and other services" is broad enough. Hardware wallets, a tool for storing private keys, are theoretically in a gray area where sales are prohibited. Therefore, platforms such as Taobao, JD.com, and Pinduoduo have not supported searches for any "currency-related" keywords.
But the reality is completely different.
As of July 29th, I conducted direct keyword searches on Taobao, JD.com, Pinduoduo, and Douyin for five hardware wallet products: Ledger, Trezor, SafePal, OneKey, and imKey (imToken). The results showed that the buying and selling channels were quite smooth.
Among them, the Douyin platform has the most comprehensive offerings, with Ledger, Trezor, SafePal, OneKey, and imKey all sold in stores.
The second is JD.com, where hardware wallets can be found for sale by searching for Ledger, Trezor, SafePal, and OneKey. The imKey-related stores should have been removed from shelves due to a security incident.
Taobao is relatively strict, and only one store selling imKey was found. Xiaohongshu does not have a direct store search, but second-hand private sales and purchasing agent posts can be found everywhere.
There is no doubt that except for a very small number of agents, most of the above stores are small retailers from unofficial channels. They have neither obtained brand authorization to settle in nor can they guarantee the safety of the equipment circulation process.
Objectively speaking, the agency/distribution system for hardware wallets exists globally, including brands such as SafePal, OneKey, and imKey, which are more popular in the Chinese-speaking region. Their sales systems are roughly the same:
Official direct purchase: You can place orders for various models of hardware wallet products on the official website;
E-commerce channels: In China, they are usually paired with WeChat stores such as Youzan, while overseas, they rely on official platforms such as Amazon.
Regional distributors: Authorized agents in various countries/regions provide users with localized purchasing channels and can verify authenticity on the official website. For example, SafePal provides a global distributor query page on its official website;
However, in the domestic e-commerce ecosystem, the vast majority of users still purchase through unofficial channels that cannot be verified and traced, which provides a natural breeding ground for the gray market's "pre-set mnemonic phrase trap."
Many of these devices may be "second-hand/third-hand circulation" or even "counterfeit devices". It cannot be ruled out that some devices are unsealed, initialized, and pre-set with mnemonics during the resale process. Once the user activates the device, the assets will naturally go directly into the scammer's wallet.
Therefore, the most critical issue is, in addition to the sales end, can the user end conduct self-verification and risk protection on the hardware devices purchased to ensure that all related risks are eliminated?
2. User-side vulnerabilities and the "self-verification" mechanism
To put it bluntly, the reason why this type of hardware wallet trap is so successful is not because there are technical defects in the device itself, but because the entire circulation and use process exposes multiple exploitable vulnerabilities.
From the perspective of domestic e-commerce and agent distribution chains, the main risks are concentrated in two areas:
Second-hand or multi-hand circulated devices: The gray market will unseal and initialize second-hand devices or those in circulation, and pre-set mnemonics or accounts. Once the user directly uses the device, the assets will be imported into the scammer's wallet.
Counterfeit or tampered devices: Fake devices may flow into unofficial channels, or even have built-in backdoors. After users transfer their assets into them, they face the risk of having their entire balance stolen.
For Degen users who are already familiar with hardware wallets, these traps are almost harmless because they will naturally perform security verification during the purchase, initialization and binding process. However, for novice users of hardware wallets who are purchasing for the first time or lack experience, the probability of being tricked soars.
In this latest security incident, scammers created a wallet in advance and then provided a fake paper manual. They then instructed the purchasing user to unpack the product and activate it with a fake process, thereby directly transferring the assets. According to the author's communication with relevant practitioners, the situation of unpacking products and selling them with fake manuals has indeed begun to appear more frequently recently.
After all, many novice users tend to overlook product integrity (whether the packaging has been opened, whether the anti-counterfeiting sticker is damaged), easily forget to compare the list of items in the package, and are not aware that the "new/old device" verification can be completed in the official app. If this information is correctly verified, most traps can be detected immediately.
It can be said that whether the product design of the hardware wallet can fully cover and actively support the user end to perform self-verification is the most critical gate to breaking the gray market attack chain.
Taking SafePal's Bluetooth-based X1 hardware wallet as an example, its self-validation path on the user side is relatively complete:
First-time binding reminder: When you activate the hardware wallet and bind the app, you will be prompted "The device has been activated, is this the person who is doing the operation?"
Display of historical activation information: It is reported that the SafePal interface will also display the time of the first activation of the device and whether it is the first binding of the phone, helping users to immediately determine whether the device is a brand new one or has been initialized by someone else;
In addition, based on the author's actual usage experience, whether it is the SafePal S1 and S1 Pro that use the QR code interaction mechanism, or the SafePal X1 that uses Bluetooth for information interaction, both allow users to view the SN code and historical activation time of the corresponding hardware wallet at any time after binding the SafePal App (as shown in the figure below) to further confirm the source and usage status of the device.
This is due to the fact that SafePal's hardware wallet writes a SN to each device when it leaves the factory, and also binds the hardware fingerprint information of this hardware device to this SN and saves it in the SafePal background to further confirm the source and usage status of the device.
That means that when a user uses this hardware wallet for the first time, they need to activate it before they can create a wallet. During activation, the mobile app will send the SN and fingerprint information of the connected hardware wallet back to the SafePal backend for verification. Only when they match will the user be prompted that the hardware wallet can continue to be used and the activation time will be recorded.
When other mobile devices are bound to this hardware wallet again, the user will be prompted that the hardware has been activated and is not being used for the first time, and the user will be asked to confirm again.
Through these steps of verification, users can almost identify second-hand traps or counterfeit devices when they first come into contact with the device, thereby cutting off the first step of the common attack chain of the gray market.
For first-time hardware wallet users, SafePal's visual and traceable verification mechanism is easier to understand and implement than simple instructions or text warnings, and is more in line with actual fraud prevention needs.
3. Hardware Wallet "Full Process" Security Manual
In general, for users who are new to hardware wallets, it does not mean that their assets can be safe as long as they buy a hardware wallet.
On the contrary, the security of a hardware wallet is not achieved with a one-time purchase. Instead, it is a line of defense built by security awareness in the three links of purchase, activation, and use. Negligence in any link may become an opportunity for attackers.
1. Purchase process: only use formal channels
The security chain of the hardware wallet begins with choosing the purchase channel, so it is recommended that everyone go directly to the official website to purchase.
Once you choose to place an order on an e-commerce platform/live broadcast room, or purchase from a second-hand platform, such as through unofficial links such as Taobao, JD.com, and Douyin, it means being exposed to extremely high risks - no cold wallet brand will sell products through Douyin live broadcasts or Kuaishou links, these channels are almost all the main battlefields of gray industries.
The first step after receiving the goods is to check the packaging and anti-counterfeiting labels. If the packaging has been opened, the anti-counterfeiting sticker is damaged, or the inner packaging is abnormal, you should immediately be vigilant. It is best to check the packaging items item by item according to the list published on the official website to quickly eliminate some risks.
The more carefully you do this stage, the lower the subsequent security costs will be.
2. Activation: Not initializing is like "giving away money"
Activation is the core link in hardware wallet security, and it is also the stage where gray industries are most likely to set traps.
A common tactic is for gray industries to open the device in advance, create a wallet and write in mnemonics, then insert a forged instruction manual to guide users to directly use this ready-made wallet, and ultimately seize all subsequent transferred assets. This is the case with the recent JD.com imKey fraud incident.
Therefore, the first principle of the activation process is to self-initialize and generate a new mnemonic. During this process, products that can perform device status self-checks and historical activation verification can significantly reduce the risk of passive user exposure. For example, the SafePal mentioned above will prompt whether the device has been activated before during the first binding, and display the historical activation time and binding information, allowing users to identify abnormal devices at the first time, thereby cutting off the attack chain.
3. Usage: Keep the mnemonics and physical isolation
After entering daily use, the core security of hardware wallets is mnemonic phrase management and physical isolation.
The mnemonic phrase must be saved by hand. Do not take photos or screenshots, and it must not be stored through WeChat, email or cloud storage, because any online storage behavior is equivalent to actively exposing the attack surface.
When signing or transacting, Bluetooth or USB connections should be used for short periods of time and on demand. Scanning QR codes for signatures or offline data transmission should be prioritized to avoid long-term physical contact of the device with the network environment.
It can be said that the security of hardware wallets is never "infallible" when purchased, but rather a line of defense built by users in the three major links of purchase, activation, and use:
Eliminate second-hand and unofficial channels during the purchase process;
The activation phase automatically initializes and verifies the device status;
Keep the mnemonic phrases in mind during use and avoid long-term online exposure;
From this perspective, hardware wallet manufacturers urgently need to provide users with a verifiable "full-process" mechanism design like SafePal, which displays the first activation prompt, activation date, and binding information. Only in this way can the hunting chain on which the gray market relies for survival be truly ineffective.
Final Thoughts
Hardware wallets are a good tool, but they are never the ultimate amulet that can give you peace of mind.
On the one hand, major hardware wallet manufacturers need to be aware of changes in the market environment in a timely manner, especially targeting the "hunting chain" that novice users are prone to encounter, and build more intuitive and easy-to-operate verification mechanisms in product design and usage processes, so that every user can easily judge the authenticity and security status of the device in their hands.
On the other hand, users themselves must also develop good security habits. From formal purchase to initialization and activation, to daily management of mnemonics, every step cannot be omitted, and a sense of security must be developed throughout the entire usage cycle.
Only when the wallet's verification mechanism forms a closed loop with the user's security awareness can the hardware wallet move one step closer to the goal of "absolute security."