Crypto News & Watchlists

Report: Zimbabwean Crypto Trader Uses Recovery Phrase to Steal Digital Assets Worth $457K From Client

Report: Zimbabwe Crypto Trader Uses Recovery Phrase to Steal Digital Assets Worth $457K From Client

A Zimbabwean crypto trader has appeared in court to face theft and money laundering charges after prosecutors accused him of stealing digital assets worth more than $457,000 from his client. The crypto trader is accused of siphoning the digital assets using seed phrases and passwords he obtained when he helped set up the client’s crypto wallets.

Crypto Trader Used Wallet Seed Phrases to Steal Digital Assets

A Zimbabwean crypto dealer, Lloyd Chiyangwa, has been accused of siphoning more than $457,000 worth of assets from crypto wallets belonging to one of his clients, a report has said. According to prosecutors, Chiyangwa stole the funds using the seed phrases and passwords he obtained when he initially helped the unidentified client create crypto wallets.

As per the report in the Herald, Chiyangwa’s client initially bought the digital assets in July 2020 from an unidentified United Kingdom-based company. At the time of the purchase, the client lived in India. However, after returning to Zimbabwe sometime in 2021, the client sought the crypto dealer’s help in setting up five wallets, namely: Trust Wallet, Metamask, Exodus, Cosmostation, and Wemix.

Crypto Trader a Flight Risk

Although Chiyangwa is alleged to have committed the crime between Oct. 2021 and March 2023, the client only discovered the theft in May when he attempted to trade using the Trust Wallet. According to the report, Chiyangwa withdrew the funds from the client’s wallet in seven transactions. The largest single withdrawal was $261,500 while the lowest was $5,155.

Chiyangwa, who now faces theft and money laundering charges, is alleged to have used the stolen funds to buy two iPhones, a laptop, and a Mercedes Benz.

Meanwhile, in their submission against Chiyangwa’s bail application, prosecutors insisted that the crypto dealer, a holder of two passports and owner of two South African bank accounts that received part of the stolen money, is a flight risk and hence not a suitable candidate for bail. According to the report, Harare regional magistrate Marehwanazvo Gofa remanded Chiyangwa in custody while the court studies his bail application.

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