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Feds arrest couple, seize $3.6B in hacked Bitcoin funds

washingtonpost.com

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Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#551

Post by parineum »

nobody9999 wrote: post #486
parineum wrote: post #308

Earlier quoted context omitted.

For non-high profile investigations (investigations that were not in the media before charges), announcing charges typically has a large body of evidence and a lot of confidence in the accusation. Of course innocent until proven guilty applies but the justice department knows that and still brought charges. At the very least, they believe they've proven beyond a reasonable doubt his guilt. High profile cases with pub…

>Of course innocent until proven guilty applies but the justice department knows that and still brought charges. At the very least, they believe they've proven beyond a reasonable doubt his guilt. It's a bit of a nitpick, but the Justice Department (DoJ) hasn't proven anything. The defendants in question have been charged (and arrested?), but no trial (or plea bargain) has been held. As such, presumably the DoJ has w…

I mean that they have proven it to themselves, I don't mean it in a legal sense.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#552

Post by pshc »

tevon wrote: post #510
colinmhayes wrote: post #5

Earlier quoted context omitted.

$4 billion has got to buy an awful lot of compute time, but still, how did they decrypt the file?

Is it me or should he have literally just gotten a hardware wallet, transferred everything to that account, then burned the old key? Of course that txn would show up on-chain, but if you don't have possession of the private key for the first account, and no digital device has ever "seen" the hardware account then he would've been fine. This is assuming the key piece of evidence was his private key, and he wouldn't ha…

Yeah, a hardware wallet is good, although for a billion dollars, 100 hardware wallets would be better. Could even go so far as to split a private key into seven horcruxes using Shamir's Secret Sharing and bury them in locations around the world.

Memorizing a seed phrase leaves you vulnerable to a $5 wrench attack, I wouldn't recommend it.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#553

Post by PeterisP »

robgibbons wrote: post #180
fxtentacle wrote: post #4

Shouldn't all true crypto believers hate this news? It's the government trying to enforce their opinion of who should own those Bitcoins, thereby taking power away from the owner that the network has decided on, which would be "whoever has the cryptographic keys".

Technically they were charged with conspiring to launder money, completely unrelated to any mention of theft or hacking. From TFA: "Court papers filed against the couple did not accuse them of the hack itself; officials declined to say if the pair are suspected of stealing the money."

All it says is that they don't yet have strong evidence to expect a conviction on hacking charges. And it's quite likely that some other people were involved in the hack itself - perhaps after this arrest, they will get some new information that will allow them to charge someone for the hack itself, for example, out of a plea deal when one of the gang turns against the others.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#554

Post by 323 »

AlexanderTheGr8 wrote: post #163
wcoenen wrote: post #153

Earlier quoted context omitted.

Mixing is not laundering. The difference is that laundering provides you with an explanation for wealth and/or income. Example of laundering: buy a business (with clean or borrowed money), have fictional customers "spend" their cash money at your business every day, then report your income and pay taxes. Now if anybody asks about where you got your money, you have a seemingly legit explanation. Mixing does none of th…

tornado.cash puts your crypto in a completely fresh account (using smart contracts). You can claim that you earned this crypto mining it back in 2010. You can definitely come up with a decent excuse for this. Then you can convert those crypto (in new account) into fiat money. Everyone will know you are lying, but they will never be able to prove it.

If you read the indictment, they claimed they had bitcoin from mining in 2011, the exchange asked for further proof, and they just abandoned the bitcoin (~$150k). The exchange surely notified the authorities, because who abandons $150k of legit bitcoin?

So claiming it was from mining didn't work in this particular instance.

They don't need to prove you are lying in all instances, it's enough to prove you are lying in one instance. They will get you for that one instance where you didn't launder it properly if they are after you.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#555

Post by [deleted] »

kodah wrote: post #142
pavel_lishin wrote: post #129

Earlier quoted context omitted.

They're easy to hide as long as the federal government isn't trying to tie you to 4.5 billion worth of something.

Even with the fervor of the federal government they'd be easy to hide. A USB is tiny, and you can shrink it's footprint with USB-C. You can also buy USB keys with tamper-proof housings that will blow a fuse if opened to be physically compromised. Coupled with strong post-quantum crypto, that key is relatively secure, even if physically discovered. That's just the technical bit. You can also split the key in half and…

[deleted]

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#556

Post by fallingknife »

tablespoon wrote: post #536
cobookman wrote: post #454

Earlier quoted context omitted.

Is it illegal to sell your artwork at an auction, and a criminal happens to be the one to buy it? I honestly don't know. is the onus on an artist or on an "auction house" to vet buyers. If post sale it turns out the money was fraudulent, does the artist need to pay it back? In crypto terms. You the artist simply put a NFT up for auction at OpenSea. You the scammer happened to purchase the artwork on OpenSea. However…

> If post sale it turns out the money was fraudulent, does the artist need to pay it back? Maybe? IIRC, if you unknowingly buy stolen property, and they trace it to you, I think you have to surrender it to its rightful owner (without compensation from the police).

I don't think that works with money, though. I can't imagine someone who sold a house to Bernie Madoff would have to give up the proceeds of the sale years later when he is found out to have been running a Ponzi scheme.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#557

Post by astrange »

vmception wrote: post #494
mritchie712 wrote: post #441

Earlier quoted context omitted.

Her delivery reminds me of a CEO being forced by their HR department to "do a rap" in the 2000's to "relate" to their employees.

How about the 2010s! A VC firm had a tradition of making all their portfolio companies participate in an annual rap and dance. I think I had to participate in an Gangnam style rendition. Probably not that hard to find, with that information.

Record companies are just VC firms who make their whole portfolio sing and dance.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#558

Post by GekkePrutser »

danso wrote: post #3

The statement of facts is linked to from the press release, and describes generally how the Feds were able to trace the stolen funds (they found a file listing private keys, after gaining access to the suspect's cloud storage) https://www.justice.gov/opa/press-release/file/1470186/downl... > The 2017 transfers notwithstanding, the majority of the stolen funds remained in Wallet 1CGA4s from August 2016 until January 3…

Wow. Such hacking prowess. Such bad opsec. Weird.

Ps not condoning the theft but I just find it strange that people with the skills to steal this much get caught using bog standard cloud storage. You'd think they could afford something better ;) Something along the lines of "you don't take notes on a criminal f** conspiracy" :)

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#559

Post by [deleted] »

capableweb wrote: post #469
Waterluvian wrote: post #446

Earlier quoted context omitted.

There isn’t a worthy discussion left to be had about crypto that isn’t discussing its role in fraud.

That's such a sad view, especially to hold in a generally curious place like HN. Another example is narcotics, yes we know that most narcotics usage is bad, but does that mean all usage of narcotics is bad? Obviously not, and we take those articles as they come, and discuss the angles each article has independently, in most cases at least. But somehow cryptocurrencies are so emotional for most people, that they hold…

[deleted]

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#560

Post by nybble41 »

thereddaikon wrote: post #329
nybble41 wrote: post #104

Earlier quoted context omitted.

In the scenario outlined there would be no unauthorized access to any systems, whether owned by Bitfinex or anyone else, so I really don't see how the CFAA could possibly apply here. As for the cryptocurrency network itself, the protocol is that anyone who has the private key is authorized to spend the corresponding funds—how the key was obtained is irrelevant. Of course, correctly guessing a 256-bit random private k…

CFA would likely consider a bitcoin wallet a "system". You weren't authorized to access funds in that wallet. And even if it weren't that's no different than guessing someone's bank account number and paying for purchases that way. Its still someone else's money and its still stealing.

> CFA would likely consider a bitcoin wallet a "system". You weren't authorized to access funds in that wallet.

We don't have to guess. The CFAA refers to unauthorized access to computers, not "systems". The Bitcoin network is not a computer, and someone posting a transaction signed with some key, however that key was obtained, is using the network as intended and not accessing either the Bitcoin network as a whole or the individual computers comprising the Bitcoin network in an unauthorized manner.

> And even if it weren't that's no different than guessing someone's bank account number and paying for purchases that way.

It is different, because in that scenario you're claiming to be the designated account owner, a specific legal person authorized by contract to direct the bank to pay money from that account—not just someone who knows the account number. You generally have to sign a statement to that effect in addition to providing the account details. If you aren't the account holder then you're committing fraud. (Though practically speaking it's really a bit ridiculous that merely knowing the account number—something printed on every check and hardly a closely-held secret—is considered sufficient to set up a direct debit.)

By design, Bitcoin doesn't care about your real-world identity; it only cares about whether you know the private key.

> Its still someone else's money and its still stealing.

Wrong on both counts. Bitcoins are an abstract concept, much like points in a game. They are governed by voluntary consensus among Bitcoin users according to a particular specialized system of rules, and not your private property. In short, they're "yours" only as long as the network says they're "yours". If other Bitcoin users stop recognizing those bitcoins as "yours" for whatever reason—a blockchain fork, a change in the consensus rules, someone else guessing your private key and spending them—you have no legal recourse. There are no physical goods involved which you could sue to have returned to you, and no legally-binding contracts between you and any other participants in the Bitcoin network which you could claim were breached by the change.

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