The curious case of the $ 600 million crypto heist – .

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The curious case of the $ 600 million crypto heist – .


Paris (AFP)

Cryptocurrency investors have been mesmerized in recent days by the antics of a mysterious hacker who stole over $ 600 million – before gradually giving it back.

But was the thief a Good Samaritan who stole the money to expose a dangerous security hole, or did he just realize he was about to get caught?

The hacker struck Poly Network, a company that handles cryptocurrency transfers, on Tuesday in one of the largest digital money thefts in history.

But Thursday, the author had returned almost all of the stolen funds in a slow net of transactions.

In messages embedded in the transfers, the thief insisted that the money was stolen with good intentions.

“I am not very interested in the money! The hacker wrote, adding that it was “still planned” to return the funds.

– Digital detectives –

Despite their volatility and concerns about the enormous waste of electricity they generate, cryptocurrencies like Bitcoin and Ethereum have grown in popularity in recent years.

Their combined market value currently stands at nearly $ 2 trillion, creating an attractive prospect for hackers.

Most notoriously, thieves stole 850,000 Bitcoins from the Japanese exchange Mt. Gox in 2014. Worth around $ 470 million at the time, the coins are now worth $ 38 billion.

Another Japanese exchange, Coincheck, was hacked for almost $ 500 million in 2018.

But in both cases, the technology used by the cryptocurrency made it possible to trace some of the funds – albeit for Mt. Gox, he arrived too late to save the business.

U.S. oil company Colonial Pipeline paid hackers a $ 4.4 million Bitcoin ransom in May, but FBI was able to locate most of the coins and seize them Drew Angerer GETTY IMAGES NORTH AMERICA / AFP

Cryptocurrencies use blockchains, digital ledgers that record every transaction made.

Pawel Aleksander, an expert in tracking stolen cryptocurrencies, said thieves typically try to cover their tracks by dividing the money and moving it – “sometimes using hundreds of thousands of back-to-back transactions.”

But his company Coinfirm is one of a growing number that specializes in tracking dizzyingly complex blockchain transactions, helping law enforcement and investors track down stolen assets.

While many crypto aficionados hail the Poly hacker as a hero of principle, others suspect that they began to return the money because detectives were on their trail.

The returns began after SlowMist, another investigative company, claimed to have identified some of the hacker’s personal information, including his email address.

“It’s hard to say what the hacker’s original intention was,” Aleksander’s colleague Roman Bieda said.

“The hacker might just be afraid of actions taken against him,” he suggested, although he added that ethical “white hat” hackers often seek to publicly shame companies for their security breaches.

In an encrypted exchange with the hacker nicknamed “Mr. White Hat,” Poly offered $ 500,000 as a reward and promised, “We assure you that you will not be responsible for this incident. ”

But the hacker wrote that they had refused the bounty, saying, “I’ll send all their money back. “

– The end of the Far West? –

Crimes involving cryptocurrencies are on a downward trend, despite spectacular thefts like this and concerns about their use by criminal gangs.

A report released this month by security firm CipherTrace estimated global crypto-crime losses at $ 1.9 billion last year, up from $ 4.5 billion in 2019.

He cautioned, however, of an alarming increase in decentralized finance hacking and fraud, or “challenge,” a form of crypto-finance, including lending, designed to weed out middlemen like banks.

The Poly heist is part of that trend, with the company calling it the biggest hack “in challenge history.”

“The imaginations of fraudsters in this industry are constantly evolving,” said Syedur Rahman, a British lawyer specializing in cases involving cryptocurrencies.


The main cryptocurrencies Valentin RAKOVSKY AFP

But he added that stricter regulations increasingly force cryptocurrency exchanges to verify the identity of users, while law enforcement agencies are increasingly experienced in handling crypto. -crimes.

Hackers extracted a $ 4.4 million Bitcoin ransom from oil company Colonial Pipeline in May, but the FBI was able to locate most of the coins and seize them.

However, recovering stolen crypto-assets can still be difficult.

“Criminal activity in crypto is very multinational,” Aleksander said.

“It is typical that victims sit in different jurisdictions and that the exchanges are recorded in different jurisdictions. “

The victims’ battle to recover the money stolen from Mt. Gox hack got bogged down in years of international litigation.

And hiring detectives to track down stolen assets is an expensive option that is often out of reach for individual investors affected by hackers.

“When you have a consumer who has lost nominal money, there isn’t much you can do,” Rahman said.

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