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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

#841

Post by loceng »

runeks wrote: post #792
loceng wrote: post #364

Earlier quoted context omitted.

How exactly are you punishing innocent people? What's happening is you're rewarding thieves. Your example doesn't fit what I am saying either. With a digital currency you can do a pre-sale trick, so you'll see the funds were stolen - and you then don't sell them the car in the first place. We can't incentivize theft.

> With a digital currency you can do a pre-sale trick, so you'll see the funds were stolen - and you then don't sell them the car in the first place. It's a race against time. As soon as the coins are sent to a new address you can't know whether goods or services were exchanged in this process and you are thus punishing a well-intentioned seller as opposed to the thief.

Isn't there a log to immediately know what wallet coins just came to to the new address? E.g. you could check the history of the new address, to see where the coins came from, before approving the transaction by first verifying it didn't come from known stolen funds?

Isn't that the prime value of blockchain - the immutable chain/record of transactions?

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

#843

Post by EVa5I7bHFq9mnYK »

rednerrus wrote: post #576
albroland wrote: post #6

fwiw, it appears one of the named here is a YC Alum: https://news.ycombinator.com/user?id=il https://www.linkedin.com/in/unrealdutch/

Andreessen roasting this guy all morning is making my day: https://twitter.com/pmarca/status/1491150099518398466

Wow, twitter went full pinterest now and refuses to let me read tweets without an account ...

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

#844

Post by FabHK »

wcoenen wrote: post #153
AlexanderTheGr8 wrote: post #117

Earlier quoted context omitted.

I agree. But if not for privacy, why use crypto at all? Even bank accounts are reasonably private, if you are not doing anything considered suspicious by society. Also, with mixers such as tornado_cash, laundering money is , sadly , pretty trivial.

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…

Regarding NFTs and money laundering, see the inimitable Matt Levine here (second story, Oh by the way):

https://www.bloomberg.com/opinion/articles/2022-01-19/washin...

> This is called “money laundering,” and the essential component of money laundering is generating fake taxable income. If you take $13,800 out of your (legitimate, previously taxed) bank account, and you use it to buy cryptocurrency in a wallet that you tell your accountant and the IRS about, and you then use that cryptocurrency to buy a Meebit, and then you take $50 million out of your sack of illegal money, and you use it to buy cryptocurrency in a wallet that you don’t tell your accountant about, and then you use that cryptocurrency to buy the Meebit from your declared wallet, and then you take the $50 million of cryptocurrency out of the declared wallet and put it back in your (legitimate) bank account, and then you write the IRS a check for $20 million saying “ah I’ve been selling NFTs, what fun I have had, but I have to pay the IRS my fair share,” then … I am obviously not going to give you advice on crime but it’s possible you’ve got something there? Like, nobody has any idea what a Meebit is worth, so this string of outlandish numbers is somewhat plausible? It’s possible that some number of NFT wash trades have a purpose other than pumping up volume on NFT platforms?

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

#845

Post by EVa5I7bHFq9mnYK »

philip1209 wrote: post #624
albroland wrote: post #6

fwiw, it appears one of the named here is a YC Alum: https://news.ycombinator.com/user?id=il https://www.linkedin.com/in/unrealdutch/

It would be ironic if the "cloud storage account" the feds accessed was Dropbox. "YC company helped indict YC founder"

They wrote that cloud storage is of the same provider as their email. So I guess Google.

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

#846

Post by FabHK »

AlexanderTheGr8 wrote: post #189
paulpauper wrote: post #144

Earlier quoted context omitted.

you would only need to memorize one seed to spawn infinite key pairs

can you elaborate? I find this very interesting. We can't choose which private key we get. So is it possible for 1 seed to generate all of them? Doesn't that break information theory (Shannon's compression limit)?

Just to clarify: the statement is not that you could encode those existing 2000 private keys with one short seed (you cannot, indeed), but rather that you could easily and safely generate 2000 distinct private keys from one relatively short seed.

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

#847

Post by EVa5I7bHFq9mnYK »

BobbyJo wrote: post #107
tsimionescu wrote: post #100

Earlier quoted context omitted.

Well, the police had a search warrant, so the police could have found them if they had had them in their possession anyway. Sure, they could have destroyed them, losing the money but maybe not getting arrested?

When a few billion is at stake, you think they'd make the effort to memorize the keys. Or at least encrypt them.

What makes you think it was not encrypted? Of course it was.

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

#848

Post by koonsolo »

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".

> which would be "whoever has the cryptographic keys".

This is still true, no? Now the government has the keys, so they own it. It's clear that you can't be sloppy with your keys, because "whoever has the cryptographic keys".

If they used a brainwallet (https://en.bitcoin.it/wiki/Brainwallet), the gov wouldn't have taken those keys.

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

#849

Post by EVa5I7bHFq9mnYK »

paulpauper wrote: post #138
AlexanderTheGr8 wrote: post #64

> “After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein,” the press release said. “Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and rec…

Tornado only works for eth. they would need a bridge. they were done-in by I am assuming to be a weak password, enough entropy would have made it uncrackable

I would guess a keylogger

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

#850

Post by seibelj »

vmception wrote: post #827
seibelj wrote: post #768

Earlier quoted context omitted.

I think pretty damning are accounts tied to their personal identities and emails to exchanges where they lied about the source of funds. How can they explain that away? Their email addresses were hacked? Funds moved to their personal bank accounts and used for expenses was unintentional? It seems like a big stretch.

okay I finished reading it, it is pretty damning and the report does say that it is just one agent investigating certain specific criminal charges that "doesn't reflect all of the investigations of the government" Ilya had trouble figuring out how to launder it Still the outstanding question is whether he is the only one with the encrypted files, or if he was a service provider. not that its a real question to me, it…

There is certainly the potential for an argument that they didn't do the hack, that someone else was more involved, that they were small players in this, etc. but it's highly likely they were involved in some way.
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