Home » Behind the $3.6 Billion Theft – Digital Currency/Blockchain

Behind the $3.6 Billion Theft – Digital Currency/Blockchain

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On February 9, the “male and female thieves” who committed “the second-largest bitcoin theft in history” were arrested in a high-profile manner and seized up to 3.6 billion US dollars of “dirty money”. For a time, public opinion was in an uproar, and the emotions of all parties were quite complicated. There are the proud US Department of Justice, the delighted Bitfinex exchange, the dejected thief couple, and the doubtful people who eat melons.


Bitcoin is still the same Bitcoin, and the untraceability under the “decentralization” mechanism has not changed.But the key problem is that when transferring“stronghold”It was discovered by the U.S. Department of Justice with upgraded equipment.

What about untraceable? Blame it on the “black market”…

According to reports from the Wall Street Journal and other media, the “hermaphrodite” did not directly send the stolen bitcoin from the Bitfinex exchange to the digital wallet under Lichtenstein’s name.Instead, it passed through a “darknet market” called AlphaBay in the middle.

AlphaBay was the largest website of its kind at the time, involving various illegal transactions such as drugs and false documents.

The thieves access the site through a special browser that hides their identities and use a “mixer” on it to “break up” digital currency transactions. This service can accept users’ digital currency before returning a different currency to prevent tracking by law enforcement officials.

The operation is very complicated and the investigation is difficult! Yet the Justice Department has made up for tactical deficiencies with strategic success.


Just 6 months after the “hermaphrodite” stole bitcoin from the Bitfinex exchange and operated it through AlphaBay,This mysterious dark web site was directly shut down.

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According to the US news website WIRED, in July 2017, the FBI, the US Drug Enforcement Administration (DEA) and the Thai police jointly arrested AlphaBay administrator Alexandre Cazes and confiscated his server in Lithuania.

While prosecutors in the case did not directly say how the stolen funds were initially linked to “hermaphrodite thieves,” digital currency analysis firm Elliptic Enterprises Ltd. Tom Robinson, co-founder of AlphaBay, believes that the US Department of Justice likely targeted the couple through the AlphaBay website.

Robinson (after confiscating the server) had this to say:The government may have accessed AlphaBay’s internal transaction logs, which led to the tracking of stolen Bitfinex funds.

The data on the server allows investigators to track the flow of funds and determine Lichtenstein’s withdrawal behavior and subsequent whereabouts.

The Washington Post directly disclosed that, according to the Internal Revenue Service (IRS), the withdrawal records on the AlphaBay website were eventually traced to a group of digital currency exchange accounts, some of which were in the names of the thieves and the couple.And two accounts shared login information from the same location in New York, USA.

In addition to laundering money through AlphaBay, the IRS also pointed out that the couple also“jump chain”This sophisticated technique “launders” traces of stolen funds.

It is to switch to another digital currency (such as Monero) and obfuscate its traces of funds in the blockchain by mixing transactions of multiple Monero users (both real and virtual).

However, the Ministry of Justice today is not the one it was five years ago. The power of equipment upgrades should not be underestimated, and traces of the transfer of funds have been traced.

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Equipment upgrade!

Over the past few years, the U.S. government has established investigative mechanisms to track stolen digital currency, updating and supplementing traditional investigative methods.

The U.S. Department of Justice is currently engaged with Chainalysis Inc. Signed cooperation agreements with analytics companies including Elliptic and digital banks including Anchorage Digital,Seek to build software programs that can track illicit funds across the blockchain.

Just last October, the U.S. Department of Justice established the Digital Currency Enforcement Team (NCET) to specifically respond to the growing proliferation of digital currency crimes.In particular, providing infrastructure and mixing services for money laundering mentioned above.Isn’t this the two money laundering lines of AlphaBay and Hybrid Monero?

Male and female thieves: It feels like we’re being targeted.

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