SoCal man loses life savings when crypto account gets compromised

CHATSWORTH, Calif. — Less than a month ago, Phil Villareal had a cryptocurrency wallet online worth more than $30,000.

Villareal said it was seed money to help his family.

“That’s a lifetime of money for me right there,” he said. “That money for me was going to be a gateway to helping my nephew and niece with their college.”

Villareal explained how he began investing in cryptocurrencies a few years ago because of the potential for massive returns compared to a traditional bank account. One morning in late April, when he signed into his account on the crypto exchange Uphold, he he noticed his account had been drained in a series of transactions transferring funds to an unknown digital wallet.

“I was in panic,” he said. “Because I’m a religious person, the first thing I did was basically just go to my faith and pray on this.”

Villareal added that he began to contact Uphold through opening online customer service tickets and calling a number that came up via Google.

He added that he had chosen Uphold for his investment portfolio because it had more than a million users and because it sold his crypto coin of choice, Ripple (XRP).

Villareal not only had two-factor authenticator set up for extra security, but he said he made sure not to sign into his account from public Wi-fi or anywhere outside his home.

“I have been leaving messages every day since April 24, since this happened to me,” he said. “To this day I have not received one phone call back.”

Villareal later learned the company offers no telephone support at this time.

Spectrum News 1 reached out to Uphold and the company’s head of fraud prevention looked into Villareal’s case.

Uphold’s investigation showed that the unauthorized withdrawals from the account occurred because the customer’s login credentials, email address, password and two-factor authentication had been compromised.

This means they were accessed by an unknown third party.

It turned out the third party was based in Indonesia.

Wallet transfers are private and untraceable; therefore, the funds can’t be refunded to Villareal’s account, according to the company.

The head of fraud prevention said this scenario could only happen because someone, somehow, gained access to Villareal’s login and password, even compromising his two-factor authentication.

“We’re very sorry indeed to hear of Mr. Villareal’s experience,” said an Uphold spokesman.

“While Uphold works very hard to protect customer accounts with layers of security measures, like any financial institution we also rely on customers to protect their own account information.”

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