UN Report: Crypto Crime Provided North Korea up to Half of Its Foreign Currency Income

March 23, 2024 Bitcoin.com

Seoul Sanctions North Korea Over Crypto Theft

February 12, 2023 Bitcoin.com

North Korea-Linked Crypto Theft Surpassed $600,000,000 in 2022, Shattering All-Time High: Report

February 9, 2023 The Daily Hodl

North Korea Stole Record Amount of Crypto Assets in 2022, UN Report Unveils

February 8, 2023 Bitcoin.com

‘Blockchain Bandit’ reawakens: $90M in stolen crypto seen shifting

January 26, 2023 Coin Telegraph

Blockchain bandit

The hacker accumulated as much as $90 million worth of crypto during a six-year thieving spree.

A hacker dubbed the “Blockchain Bandit” has finally woken from a six-year slumber and has started to move their ill-gotten gains.

According to Chainalysis, around $90 million in crypto pilfered from the attacker’s long-running string of “programmatic theft” since 2016 has started moving over the past week.

This included 51,000 Ether (ETH) and 470 Bitcoin (BTC), worth around $90 million leaving the Bandit’s address for a new one, with Chainalysis noting:

“We suspect that the bandit is moving their funds given the recent jump in prices."

The hacker was dubbed the “Blockchain Bandit” due to being able to empty Ethereum wallets protected with weak private keys in a process termed “Ethercombing.”

The attacker’s “programmatic theft” process has drained more than 10,000 wallets from individuals across the globe since the first attacks were perpetrated six years ago.

1/ $90M stolen funds on the move: After 6 years of hodling, the “Blockchain Bandit” has awoken. In this we cover how the Blockchain Bandit amassed this treasure trove and where the funds are currently held.
— Chainalysis (@chainalysis) January 25, 2023

In 2019, Cointelegraph reported that the "Blockchain Bandit" managed to amass almost 45,000 ETH by successfully guessing those frail private keys.

A security analyst said he discovered the hacker by accident while researching private key generation. He noted at the time that the hacker had set up a node to automatically filch funds from addresses with weak keys.

The researchers identified 732 weak private keys associated with a total of 49,060 transactions. It is unclear how many of those were exploited by the bandit, however.

“There was a guy who had an address who was going around and siphoning money from some of the keys we had access to,” he said at the time.

*Blockchain Bandit crypto movements. Source: Chainalysis*

Chainalysis produced a diagram depicting the flow of the funds, however, it did not specify the target address, only labeling them as "intermediary addresses."

To avoid having weak private keys, Chainalysis advised users to use well-known and trusted wallets, and consider moving funds to hardware wallets if large amounts of cryptocurrency are involved to avoid having weak private keys.

Also in 2019, a computer researcher discovered a wallet vulnerability that issued the same key pairs to multiple users.

Reversible transactions could mitigate crypto theft — Researchers

September 26, 2022 Coin Telegraph

Coin Telegraph

The proposal puts forward an “opt-in” token standard that would enable victims to report theft to a governance contract, with algorithms helping to identify and freeze ill-gotten gains.

Stanford University researchers have come up with a prototype for “reversible transactions” on Ethereum, arguing it could be a solution to reduce the impact of crypto theft.

In a Sept. 25 tweet, Stanford University blockchain researcher Kaili Wang shared a run down of the Ethereum-based reversible token idea, noting that at this stage it is not a finished concept but more of a “proposal to provoke discussion and even better solutions from the blockchain community,” noting:

“The major hacks we've seen are undeniably thefts with strong evidence. If there was a way to reverse those thefts under such circumstances, our ecosystem would be much safer. Our proposal allows reversals only if approved by a decentralized quorum of judges.”

The proposal was put together by blockchain researchers from Stanford, including Wang, Dan Boneh, Qinchen Wang, and it outlines “opt-in token standards that are siblings to ERC-20 and ERC-721” dubbed ERC-20R and ERC-721R.

Billions in crypto stolen. If we can't stop the thefts, can we reduce the harmful effects?

Over recent months, a couple other @Stanford researchers and I drew out and prototyped ERC-20R/721R to support reversible transactions on #Ethereum.

See post & :https://t.co/38Hs0F9goU
— kaili.eth (@kaili_jenner) September 24, 2022

However, Wang clarified that the prototype was not to replace ERC-20 tokens or make Ethereum reversible, explaining that it is an opt-in standard that "simply allows a short time window post-transaction for thefts to be contested and possibly restored."

Under the proposed token standards, if someone has their funds stolen, they can submit a freeze request on the assets to a governance contract. This will then be followed up by a decentralized court of judges that need to quickly vote “within a day or two at most” to approve or reject the request.

Both sides of the transaction would also be able to provide evidence to the judges so that they have enough information, in theory, to come to a fair decision.

For NFTs, the process would be relatively straightforward as the judges just need to see “who currently owns the NFT, and freeze that account.”

However, the proposal admits that freezing fungible tokens is much more complicated, as the thief can split the funds among dozens of accounts, run them through an anonymity mixer or exchange them in other digital assets.

To counter this, the researchers have come up with an algorithm that provides a “default freezing process for tracing and locking stolen funds.”

They note that it ensures that enough funds in the thief’s account will be frozen to cover the stolen amount, and the funds will only be frozen if “there’s a direct flow of transactions from the theft.”

Gonna mass-address other comments:
- If you think this is an incomplete solution, you're entirely correct. Our paper provides some pieces of the puzzle (focuses on the mechanics), but we mention many open questions surrounding decentralized gov. That space needs work.
— kaili.eth (@kaili_jenner) September 25, 2022

Wang’s Twitter post generated a lot of discussion, with a mixed bag of people asking further questions, supporting the idea, refuting it or putting forward ideas of their own.

Prominent Ether (ETH) bull and podcaster Anthony Sassano wasn’t a fan of the proposal, tweeting to his 224,300 followers that “I'm all for people coming up with new ideas and putting them out into the ether but I'm not here for TradFi 2.0. Thanks but no thanks”

I'm all for people coming up with new ideas and putting them out into the ether but I'm not here for TradFi 2.0

Thanks but no thanks https://t.co/pdSIB5Ib05
— sassal.eth (@sassal0x) September 25, 2022

Discussing the idea further with people in the comments, Sassano explained that he thinks that reversal control and consumer protections should be placed on the “higher layers” such as exchanges, and companies rather than the base layer (blockchain or tokens), adding:

“Doing it at the ERC20/721 level would basically be doing it at the "base layer" which I don't think is right. End-user protections can be put in place at higher levels such as the front-ends.”

Ukrainian Police Bust Crypto Call Centers Defrauding Investors Across Europe

September 1, 2022 Bitcoin.com

Coinbase users angry with customer support after funds disappear from accounts

August 25, 2021 Coin Telegraph

Coin Telegraph

Coinbase customers are venting again in frustration with the lack of customer support from the $65 billion company.

Coinbase is under fire for terrible customer service following reports of users accounts being hacked and drained of funds.

According to an Aug. 24 investigation by CNBC, thousands of customers across the country have lodged complaints against the company.

The outlet stated that it had interviewed numerous Coinbase customers who claimed hackers had drained their accounts, with the issue exacerbated by the exchange not responding to support requests:

Interviews with Coinbase customers around the country and a review of thousands of complaints reveal a pattern of account takeovers, where users see money suddenly vanish from their account, followed by poor customer service from Coinbase that made those users feel left hanging and angry.

One Coinbase client, Tanja Vidovic, claimed to have lost nearly all of her $168,000 in cryptocurrency holdings after receiving a number of password change security alerts in April. Attempts to contact Coinbase by phone were fruitless, Tanja said.

Another customer told the outlet that after logging in to the Coinbase app in March, almost $35,000 in various crypto assets had disappeared from his account. Coinbase’s Regulatory Response Team eventually emailed the victim stating that transactions on the blockchain are irreversible adding that Coinbase’s insurance policy does not cover theft from individual accounts.

In March, the New York Times ran a piece on a helpless Coinbase customer who eventually sued the company after losing $100,000 worth of cryptocurrency.

Venting their frustrations, other Coinbase users have taken to social media such as popular analyst Kaleo who told his 360,000 followers that the company had shown an “absolutely embarrassing display of care for customers.”

My dad has been trying to access his @Coinbase account w/ little to no help from Coinbase Support the past 3 months.

Countless emails either w/ incredibly generic replies that don't address the issue, or completely ignored. Absolutely embarrassing display of care for customers.
— K A L E O (@CryptoKaleo) August 24, 2021

The tweet, which was posted less than a day ago, had already attracted a stream of responses from other Coinbase customers that had similar problems with support or had been hacked. Coinbase did actually respond to this complaint, but one individual pointed out that:

“You will only reply and assist people who have many followers so your reputation will not go down to hell! What about us? 5 months with no help! Locked account!”

Others said “I haven’t been able to get into my Coinbase account for almost 4 months now. The worst!”

In April, when the company went public, Coinbase CEO Brian Armstrong somewhat ironically told CNBC, “People no longer need to be scared of it [crypto] like in the early days.”

Coinbase users have filed more than 11,000 complaints against Coinbase with the Federal Trade Commission and Consumer Financial Protection Bureau since 2016, and the majority of them are related to customer service.

crypto theft

Share this video