Cybersecurity firm Kaspersky has identified a new threat involving counterfeit hardware wallets designed to steal cryptocurrency funds. Attackers are distributing fake devices with tampered components and pre-set recovery phrases, which leak seed phrases after setup. These counterfeit wallets, affecting multiple brands, are part of sophisticated supply chain attacks. Users are advised to avoid wallets with pre-generated seeds, altered packaging, or unusual setup processes. It is crucial to purchase hardware wallets directly from manufacturers or authorized sellers and to generate personal recovery phrases. Reputable manufacturers are implementing secure elements to cryptographically authenticate firmware, but these measures are effective only if the device is genuine.