A very strange story was told on social networks by the co-founder of the web3 startup Webaverse, Ahad Shams. Fake investors stole $4 million in cryptocurrencies from him during a business meeting in a Rome hotel. How exactly the theft happened, Shams still does not understand, and it seems that he was not the first victim of these scammers.
The founder of Webaverse writes that the scammers posed as potential investors and negotiated with him for several weeks. Then they set up a meeting in Rome, convinced him to transfer $4 million in crypto to himself into a new Trust Wallet account, and eventually the funds just disappeared.
The scammers first contacted Shams when he was working on closing one of the first rounds of attraction. Then a man wrote to him, claiming to be the lawyer of a certain “Joseph Safra”, who allegedly wanted to invest in Webaverse. Shams checked the e-mail, and it seemed to him that it was written by a representative of a real law firm (Shams checked their website). After that, the lawyer provided him with information about his clients, which, as it turned out later, was a fake.
After several weeks of communication with a lawyer and “Mr. Safra” by mail and video, Shams agreed to meet with potential investors in Rome at the end of November 2022. Even before this meeting, the attacker, posing as Safra, stated that he would need proof of Shams’s funds, and suggested using a Trust Wallet account for this.
According to Shams, he and his colleague met with “Mr. Safra” and his lawyer for dinner, and were supposed to close the deal the next day. As requested, while still at home, he set up a new Trust Wallet account, specifically using a device that was not usually used on Webaverse. The idea was that without sharing or exposing any private keys or seed phrases, Shams’ funds would be safe.
“We sat across from these people and transferred 4 million USDC [USD Coin] to Trust Wallet,” writes Shams. “Mr. Safra” asked to see his balance on the Trust Wallet app and took out his phone to “take a few pictures.” Then we thought it was strange, but since there were no private keys or seed phrases [on the screen], we tried to treat this with understanding.”
Safra seemed pleased with what he saw, but said that he needed to go out for a while to discuss the details with his colleagues.
“We didn’t see him again, and a few minutes later the money disappeared from the wallet. I was shocked… I had no idea how these guys stole money from us,” Shams admits.
According to him, he immediately reported the incident to the Rome police and the FBI. However, the investigation has not yet been able to establish how exactly the cryptocurrency was stolen. Experts are still working on obtaining additional information from Trust Wallet about what was happening with the wallet at the time of the “drain” of funds.
So far, investigators have found that Shams’ wallet funds were split into six transactions that went to six previously unused addresses. Almost all of the funds were converted into Ethereum, Wrapped Bitcoin (wBTC) and Tether (USDT) and then passed through a group of 14 other addresses. From there, the cryptocurrencies went to four new addresses, with about 83% of the funds currently in one of them.
Interestingly, the Webaverse co-founder was not the first victim of these scammers. After the theft and the beginning of the investigation, Shams discovered that this had happened before. So, in 2021, NFT entrepreneur Jacob Riglin, the founder of Dream Lab, said on Twitter that unknown people stole $90,000 in cryptocurrency from him as part of a similar scheme, only he met with scammers in Barcelona.
Riglin was also asked to open his crypto wallet and show it to the scammers, ostensibly to confirm that he had the money to complete the transaction.
In addition, a private lawyer hired by Shams also reported other cases of such fraud. P according to him, the same group scammer contacted other of his clients earlier in 2022, which was confirmed by the coincidence of signatures in documents.
Shams notes that the $4 million loss hit Webaverse hard, but the startup has enough cash to keep it going for another 12 to 16 months. Webaverse is still looking for investors and hopes to raise more funds, and Shams says he “didn’t break” what happened.