Crypto investor Claims He Got Stolen with $70K In Coinomi [Solved]

Crypto investor Claims He Got Stolen with $70K In Coinomi [Solved]

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

Cryptocurrency investor Warith Al Mawali claimed that he was the victim of a theft as he lost $70K in life savings due to a Coinomi security flaw, according to a Reddit post that he himself published.

As always, there are two sides to every story, and it would appear that the side of the Coinomi company is the truthful one. One party says that Al Mawali’s funds disappeared as the Coinomi’s desktop wallet had a backdoor that sent passphrase information to Google; on the other side, the company affirmed it found an issue, but it was solved quickly, and there is no evidence that anything was stolen. George Kimionis, the CEO of Coinomi, tweeted that the whole situation was planned by the extortionist in order to try and scam the company out of $70K.

Coinomi - Update

The story went public when Al Mawali published blog posts in Reddit and Bitcointalk saying that he was disclosing all information because the crypto wallet allegedly refused to take responsibility.

Warith claimed to have lost funds due to a Coinomi bug, however, this was proved to be completely untrue by a reputable chainalysis firm, the results of which were published a month after the event. The firm, CipherBlade, is a trusted Blockchain investigation company that conducts thorough investigations in order to make sure their clients remain secure on the web.

Coinomi did pay CipherBlade to carry out their investigations regarding this allegation. However, CipherBlade did state in their report that had they found evidence that Coinomi handled the situation unprofessionally, or that they were actually responsible, CipherBlade would have had no qualms in publishing their findings stating such facts. Furthermore, Coinomi offered to make use of their own resources to help Al Maawali with blockchain forensics which is a process that requires a lot of time, and a lot of money.

Al Malawi claimed that the platform contains a backdoor, his “passphrase was compromised, and $60K-$70K worth of cryptocurrency was stolen because of Coinomi wallet and how the wallet handled my passphrase.”
The problem with the passphrase is that once an investor enters his passphrase to the textbox, it is automatically inspected remotely by spellcheck through googleapis.com. It is “basically an HTML file ran by a Chromium browser component,” Al Malawi said.

He affirmed that the person who got access to the leaked private key used it to steal around 17 Bitcoins units.

However, in a press release published later, the company said the seed phrase was not being transmitted in plain text but encapsulated inside an SSL HTTPS protocol with Google as the unique recipient.

In Coinomi’s official reply, they also stated that the spell-check requests were not processed, cached or stored as it returned an error as they were flagged as “Bad Request” by Google “as they were badly formed (did not contain a valid Google API key) and never actually processed them.”

Al Malawi also built a dedicated website called Avoid-Coinomi.com where he also published videos explaining the flaws and the whole story.
One of the videos posted on AvoidCoinomi tries to demonstrate the vulnerability, and it looks that the option to decrypt HTTPS is selected in the software.

Finally, Coinomi affirmed that Al Malawi was blackmailing them. Coinomi’s COO Angelos Leoussis commented on the exchange’s official Telegram group that Al Malawi kept “threatening, swearing, and blackmailing us for insane amounts.” The amount claimed by Al Malawi was a ransom of 17BTC.

This allegation has now been solved, and Coinomi holds that no further action is required from any of its users, besides the requirement to update to the last version. Coinomi states that apart from Al Malawi’s false allegation, the company has seen zero reports of hacked desktop wallets.

Recently Similar News

Latest Guides

Latest News

Bitcoin,eToro,Trading

eToro Temporarily Raises Minimum Deposit To $1,000

For the past few weeks, the increase in Bitcoin’s price has led to a massive interest in cryptocurrency trading. eToro has been overwhelmed by new registrations and has decided to temporarily raise the minimum deposit from $200 to $1,000. Although 2021 has barely gotten started, it promises to be an exciting time to invest in […]

11 January, 2021
Bitcoin,Investment,Trading

Global Cryptocurrency Market Value Surpasses $1 Trillion

Thursday has proven to be a monumental day for cryptocurrencies as the world’s combined value tops the $1 Trillion mark. Energised by a substantial rise in the value of Bitcoin in recent months, the volatile crypto market has reached a once-unreachable value. Following the latest Bitcoin Halving in May 2020, the world’s largest digital token […]

10 January, 2021
Sponsored

Victory over virus: SiGMA Virtual Expo hosts 100+ exhibitors

SiGMA Europe and AIBC Virtual Expos launch with record breaking attendance, providing a cure to the industry’s events sector In the light of this year’s changes in our everyday lives, SiGMA was close to having to stop doing what it does best; creating networks for people through the company’s iconic physical events, but luckily, the […]

26 November, 2020
Blockchain,Changelly,Cryptocurrency,Exchange Platforms

Changelly Adds Ardor, Ignis, and NXT to Changelly PRO

Changelly, the online cryptocurrency exchanges, has added three more tradable assets to their Changelly PRO platform. Changelly, the large online crypto exchange, has recently added an additional three cryptocurrencies to their Changelly PRO platform, Ardor, Ignis, and NXT. All three tokens developed by Jelurida will be tradable against BTC as ARDR/BTC, IGNIS/BTC, and NXT/BTC. Jelurida […]

6 November, 2020
Crypto Wallets,Exchange Platforms,Kraken,Ledger

Ledger Phishing Scam is Targeting Crypto Wallet Users

Ledger, the cryptocurrency wallet company, has been massively affected by a data breach and phishing scam. Ledger, the world renowned cryptocurrency hardware wallet producer, is facing a lot of problems with a data breach that is being used to target their customers. Kraken Intelligence, the intelligence arm of the Kraken cryptocurrency exchange, analyzes this data […]

5 November, 2020
Bitcoin,Blockchain,Cryptocurrency,Ethereum

Ethereum on Track to be First Blockchain To Process $1 Trillion In Yearly Transactions

Ethereum, the second largest cryptocurrency by market cap, is preparing to break the $1 trillion mark in yearly processing. Ethererum, the largest cryptocurrency behind Bitcoin, is on track to be the first blockchain to process over $1 trillion in transactions in a single year. Currently, the Ethereum network is processing more than double the amount […]

4 November, 2020
Binance,Blockchain,Cryptocurrency,Exchange Platforms

Binance is Giving Away $20,000 in Fifth Learn and Earn Series

Binance, the largest online cryptocurrency exchange, is hosting its fifth learn and earn series, this time with Orion Protocol. Binance, the worlds largest cryptocurrency exchange, will be hosting their 5th Learn and Earn campaign in collaboration with the Orion Protocol. In this campaign, Binance will be giving away $20,000 worth of ORN, the native cryptocurrency […]

3 November, 2020
Bitcoin,Blockchain,Cryptocurrency,Exchange Platforms

Bitcoin Monthly Prices Finishes at Second All-Time High

At the end of October, Bitcoin has registered its second highest closing price of all time. Bitcoin bulls continue to rejoice as Bitcoin closes at its second highest monthly price in the history of the digital currency. Bitcoin closed October with a price hovering right around $13,800, the second highest monthly price finish besides the […]

2 November, 2020