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MicroStrategy Hack: Ethereum Airdrop Over BTC—MSTR Hacker’s Waved Major Red Flags

Last Updated February 26, 2024 2:01 PM
Shraddha Sharma
Last Updated February 26, 2024 2:01 PM
Key Takeaways
  • MicroStrategy’s account was compromised, leading to a phishing scam.
  • Ethereum airdrop raised suspicions, given MicroStrategy’s well-known preference for Bitcoin.
  • MicroStrategy announced more Bitcoin purchases hours after the incident.
  • There was a temporary dip in MicroStrategy Inc.’s stock price despite Bitcoin’s stability.

MicroStrategy X account fell victim to hackers on February 26. The attackers promoted a dubious airdrop for an “MSTR token” on Ethereum, leading to around half-a-million-dollar phishing scam.

Experts point out that the post should have immediately sparked skepticism because MicroStrategy, under the guidance of its Bitcoin-bull co-founder Michael Saylor, has supported BTC over any other digital asset. Similarly, phishing scams come with several red flags, and unsuspecting victims can avoid suspicious giveaways by recognizing them early.

MSTR stock also took a hit despite Bitcoin maintaining strong support at $51K.

On the same day, MicroStrategy confirmed acquiring more Bitcoin for its treasury. 

Ethereum Token From Bitcoin Loyalist

MicroStrategy’s X account was compromised, leading to a phishing scam. The now-deleted MicroStrategy scam post promoted an MSTR token. The Ethereum-based “MSTR token” reportedly took users to a “Microstralegy” webpage.

The post said, “Built on trusted, scalable code…supplied from our $BTC reserves,” in many intriguing but contradictory words.

Firstly, the choice of Ethereum for the airdrop raised suspicions, given MicroStrategy’s well-known preference for Bitcoin. Even if MSTR were an ERC20 token, developers would follow a standard Ethereum Request for Comment 20 interface.

MSTR co-founder Michael Saylor has made his support for Bitcoin public over the years. In a recent interview with Bloomberg, he even highlighted Bitcoin’s superiority over other assets. Therefore, many questioned the scam post about promoting the ‘second best’ crypto.

MicroStrategy’s investment strategy has been heavily biased towards Bitcoin, with the company’s holdings reportedly reaching unrealized billions in profit. Investors should understand that Saylor’s promotion of any other blockchain is highly out of character for the company.

Over $440,000 was reportedly lost to this scam as per early estimates by investigator ZachXBT. The incident also underlined the ongoing issue of crypto phishing attacks on social media channels.

MSTR Stock Took Hit But Co. Buys BTC

Saylor announced on X  that MicroStrategy has expanded its Bitcoin treasury by purchasing an additional 3,000 BTC for approximately $155m. BTC purchase had an average price of $51,813 per Bitcoin as per the statement released hours after the scam. As of February 25, 2024, the company’s total Bitcoin portfolio has grown to 193,000 BTC that costed $6.09b.

Meanwhile, the scam was followed by a dip in MicroStrategy Inc’s stock price, despite Bitcoin’s stability over the support level of $51K. The incident has once again underlined the large phishing scam losses and the need for vigilance. 

Developer Robert Sasu said, “The sad reality of crypto. It is so easy to scam people and still their tokens directly. ERC token standards are not fit for the modern world of finance, it creates a safe haven for scammers.”

ScamSniffer’s January Phishing Report noted  that attacks often capitalize on major events or announcements within the crypto world, leading to spikes in scams. The scam involving MicroStrategy’s account coincided with other major events, like anticipation of the upcoming Ronin upgrade. Other reported losses, for instance, unexplained outflows from crypto exchange Bitforex’s hot wallets, were also reported.

 Scam Sniffer reported losses worth $424,786 in separate token phishing scams on Feb 26.

Learnings From Hacking Incidents

The hacking incident involving MicroStrategy’s X account and the phishing scam is a reminder of the fresh tactics that scammers are using due to crypto popularity.

While the preference for Ethereum over Bitcoin in the scam was a clear giveaway for those familiar with MicroStrategy’s investment philosophy, unsuspecting victims lost money. Investor vigilance and due diligence stay at the forefront when it comes to investments.

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