New Cryptocurrency Scam Hits FTX User’s Account Leveraging 3commas API

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Blockchain
New Cryptocurrency Scam Hits FTX User’s Account Leveraging 3commas API

Colin Wu, a blockchain reporter, stated on Twitter that a new crypto scam, dubbed ‘Contra Trading,’ has entered the crypto sector. According to Wu, an FTX customer using the 3commas API said, he noticed his account was trading the DMG token over 5,000 times. 

FTX User Affected By New Crypto Scam

In recent years, FTX has been the largest rising crypto exchange, with a massive rise in trading activity and the expansion of their partner network, 3commas.

Unfortunately, it appears a recent scam has hit the crypto exchange and reports alleged that 3commas API is to blame for the mishap. 

On October 21st, Colin Wu tweeted that a new scam has entered the crypto industry and is making waves. According to Wu, an affected user has raised the alarm on the issue. On October 19th, a customer with an FTX account with 3commas API noticed an abnormal trade on his account. 

His account was trading the DMG token over 5,000 times. This incident resulted in the theft of ETH, BTC, FTT, etc, worth over $1.6 million.

Meanwhile, the report stated that FTX has responded to the issue. According to FTX, the 3commas API key was leaked, which led to the orchestration of such a crime. 

In addition, the cryptocurrency exchange stated that incidents of such nature were not unique occurrences. Nevertheless, 3commas maintains that its security was not breached and there was no leak.

What Could Have Been The Source Of The Attack?

Although the victim reported the incident to the authorities, FTX has not taken any steps to prevent more users from being victimized through the trading API. Neither have they made any remarks that might lead to the suspension of financial transactions.

A security vulnerability in the API could be the likely culprit for the disappearance of the assets in the user’s account. Because of the vulnerability, fraudsters may have accessed the account and been able to engage in suspicious trading behavior.

It is not clear at this time where the hacking attempt first began. Despite 3commas’ assertion that there was no breach on their end, FTX has asserted that 3commas’s API key was exposed. To get to the bottom of the matter, a comprehensive investigation is required.

If the problem rests with 3commas, a simple solution may be found by stopping the platform from interacting with FTX accounts until the problem is resolved.

On the other hand, if the breach occurred on the FTX side of things, the scenario may become even more dire. Because of this, virtually any participant in the cryptocurrency exchange would be at risk of being a victim. 

Further, considering the previous point, a security compromise on one of the top cryptocurrency exchanges will not go undetected. Because FTX has a robust security staff that is solely committed to preventing hacks and vulnerabilities, any effort of this nature would have been discovered far earlier by them.

Last year, 3Commas partnered with FTX crypto exchange to offer more unique trading experiences to its users. However, for users to enjoy the services, they must open a new account with FTX or add an existing FTX account to the 3Commas platform. 

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.