Litecoin user Sees 1,000 LTC Stolen From Online Generated Wallet Address

There is a worrisome thread on Reddit right now, which discusses how one user lost 1,000 Litecoin. This user generated an address at LiteAddress.org and imported it into his Electrum-LTC client. Once the funds were transferred to the new address, it got sent to a third address without the user’s permission. This does not mean LiteAddress is bad, but it goes to show one should not necessarily use online address generators either.

Losing 1,000 Litecoin is Absolutely Horrible

This entire story goes to show how generating a wallet address online can still be risky. Using a third-party online server to create a new address and a private key is not a safe solution. This does not mean the LiteAddress.org website is compromised by any means, though. It is possible the information was captured to a malware infection on the computer as well.

Unfortunately for this Reddit user, it means he lost 1,000 Litecoin by generating an online wallet. Even if he had done so offline, the coins may have still been compromised regardless. Moreover, it is possible his mobile phone was infected with some malware, since he used the portable Electrum-LTC client. Importing the wallet and protecting it with a password won’t do much good if the device used is compromised somehow.

For the time being, it is unclear what has happened exactly.The user reports how he imported the wallet and transferred funds from the BTC-E exchange to it. A few minutes after the funds arrived, the money was sent to a new address. Apparently, someone has – somehow – gained access to this specific wallet address and its private key. A very disturbing thought that will certainly hinder mass adoption of cryptocurrency. Events like these are not very common, but they still occur far more often than anyone would like.

Moreover, now is a good time to remind people of how hardware wallets are a solid investment to keep money safe. Unlike a paper wallet or online generated address, hardware wallets do everything offline. Moreover, they do so through a device that can’t be compromised. A lot of hardware wallets support Litecoin these days, and investing in one, is an absolute must for people who take their financial situation seriously.

Header image courtesy of Shutterstock