$100M Bitcoin Heist

The users of Bitcoin have encountered new issues. We all remember the release of Bitcoin mining malware and Bitcoin malware which caused a lot of fuss among the users of this digital currency. But those are minor events in comparison to the things that happened last week. Astonishing amount of Bitcoins, 96,000 to be exact, vanished from the Sheep Marketplace. Currently the value of Bitcoin is very unstable. The exchange rate is swinging up and down; for example just couple of weeks ago the value of Bitcoin managed to drop from 1,203 USD per coin to 200 USD in one weekend. Currently a single coin is worth 1,102 USD; as a result, more than $100 million worth damage was done.

This is one of the biggest heists in modern times. It can be compared to the famous Harry Winston jewelry store robbery which resulted in loss of jewelry worth more than 100 million USD. A similar crime was committed in Europe too. Leonardo Notarbartolo managed to rob Antwerp Diamond Center in the beginning of the last decade. His crime has done damage worth 100 million USD too.

According to our sources the criminals used user-interface spoofing, as a result, member-accounts seemed to contain the right amount of coins. This strategy is frequently used by criminals which target online banks. Security expert at Rock Consulting, Tom Gorup, agreed to share his insights concerning the crime. He revealed that there are numerous reasons why this heist was so successful and the suspects are yet to be named.

The security expert claimed that the criminals managed to take control of Sheep Marketplace’s DNS servers and then routed incoming traffic through a group of servers owned by them. As a result, the hackers were capable of presenting any data they wanted to the users which were trying to access their accounts. According to Gorup, the gathered data suggests that criminals are operating a botnet. He made this conclusion because during the robbery the service was experiencing a distributed denial of service attack. The DDoS attack is capable of knocking the Sheep Marketplace offline, as a result the users are unable to reach and monitor their accounts.

According to Tom Gorup discovering and exploiting a breach in the vendor’s software was the hardest part of the attack. When the latter actions were completed, stealing the Bitcoins was relatively easy. Once the heist is completed the criminals have to solve another issue. They have to figure it out how to spend the stolen Bitcoins discreetly. It might look like an easy task knowing the fact that the stolen currency is pseudo anonymous, but this is only half of the truth. Due to the fact that Bitcoins are protected from double-spending it is possible to find out who is the owner of the coins.

These events will perfectly show how valuable BlockChain is, which is like a public ledger of Bitcoin. It has records concerning every single transaction. As a result, one cannot simply move stolen coins from one account to another in complete secrecy, as every action will be visible in the BlackChain. Furthermore, Bitcoins have another smart feature which might help tracking down the stolen currency. Every coin is unique, thus easy to identify.

There are ways how to launder traditional currencies such as US dollars or Euros using Bitcoins, but there are methods for laundering the Bitcoins themselves. “Tumblers” are the name of those services. They work on principles similar to the ones used by traditional money laundering services. Tumblers take stolen coins or fractions of them and re-introduce them, but with completely different fractions of completely different Bitcoins. Fortunately, this service is not flawless either. According to Gorup, illegally acquired Bitcoins most of the times are replaced with other stolen Bitcoins.

Following these events a thread on Reddit was created in order to find the ones responsible for this heist. The participants of the mentioned thread and Tom Gorup claim that the Bitcoins are not completely lost. They believe that it is possible to track down coins going through tumblers using BlackChain.

The fact that the heist was so successful might cause a real headache to the criminals. The more Bitcoins are stolen the harder is to launder them. If the criminals really have a botnet, it might become very useful.

Tom Gorup described a model which could have been used by the attackers in order to make the laundering of Bitcoins much easier. According to the security expert, a number of wallets with could have been created and spread through the botnet before the attack. The stolen Bitcoins were distributed among those wallets. If the attackers thought that these measures weren’t good enough, they probably implicated numerous tumbler services to complete the cleaning process of the Bitcoins. Although this method is complicated, with good preparation it becomes very effective.

At the beginning, nobody had a clue that such a vast amount of coins was lost. Sheep Marketplace’s representatives claimed that only a small portion of Bitcoins was lost. They believed that digital-currency disappeared due to an error made by a third party vendor. Nevertheless, it was soon clear that Sheep Marketplace was attacked, and the damage, which was done, was much greater.

Despite the fact that the recent events shook Bitcoin, Gorup doesn’t think that the heist has caused the drop of the exchange rate. As a matter of fact, five days after the theft, Bitcoins exchange rate was higher than ever before. According to Gorup, the following drop of value is natural because the owners of the currency started selling it. Having in mind that Bitcoin is a new currency, it is very likely that there will be a few more surges in the future until the value of it becomes relatively stable.

Events such as thefts of Bitcoins or the appearance of Bitcoin stealing and mining malware are becoming very frequent. Moreover, a new report has revealed that the foundations of the Bitcoin economy have significant breaches too. According to experts, these problems won’t be solved any time soon, as there is no institution which regulates the Bitcoin. The lack of regulation has another significant drawback. The victims of this heist are left alone, as no government institution will solve this crime.

The users of Bitcoin have encountered new issues. We all remember the release of Bitcoin mining malware and Bitcoin malware which caused a lot of fuss among the users of this digital currency. But those are minor events in comparison to the things that happened last week. Astonishing amount of Bitcoins, 96,000 to be exact, vanished from the Sheep Marketplace.

 

Currently the value of Bitcoin is very unstable. The exchange rate is swinging up and down; for example just couple of weeks ago the value of Bitcoin managed to drop from 1,203 USD per coin to 200 USD in one weekend. Currently a single coin is worth 1,102 USD; as a result, more than $100 million worth damage was done.

 

This is one of the biggest heists in modern times. It can be compared to the famous Harry Winston jewelry store robbery which resulted in loss of jewelry worth more than 100 million USD. A similar crime was committed in Europe too. Leonardo Notarbartolo managed to rob Antwerp Diamond Center in the beginning of the last decade. His crime has done damage worth 100 million USD too.

 

According to our sources the criminals used user-interface spoofing, as a result, member-accounts seemed to contain the right amount of coins. This strategy is frequently used by criminals which target online banks.

 

Security expert at Rock Consulting, Tom Gorup, agreed to share his insights concerning the crime. He revealed that there are numerous reasons why this heist was so successful and the suspects are yet to be named.

 

The security expert claimed that the criminals managed to take control of Sheep Marketplace’s DNS servers and then routed incoming traffic through a group of servers owned by them. As a result, the hackers were capable of presenting any data they wanted to the users which were trying to access their accounts. According to Gorup, the gathered data suggests that criminals are operating a botnet. He made this conclusion because during the robbery the service was experiencing a distributed denial of service attack. The DDoS attack is capable of knocking the Sheep Marketplace offline, as a result the users are unable to reach and monitor their accounts.

 

According to Tom Gorup discovering and exploiting a breach in the vendor’s software was the hardest part of the attack. When the latter actions were completed, stealing the Bitcoins was relatively easy.

 

Once the heist is completed the criminals have to solve another issue. They have to figure it out how to spend the stolen Bitcoins discreetly. It might look like an easy task knowing the fact that the stolen currency is pseudo anonymous, but this is only half of the truth. Due to the fact that Bitcoins are protected from double-spending it is possible to find out who is the owner of the coins.

 

These events will perfectly show how valuable BlockChain is, which is like a public ledger of Bitcoin. It has records concerning every single transaction. As a result, one cannot simply move stolen coins from one account to another in complete secrecy, as every action will be visible in the BlackChain. Furthermore, Bitcoins have another smart feature which might help tracking down the stolen currency. Every coin is unique, thus easy to identify.

 

There are ways how to launder traditional currencies such as US dollars or Euros using Bitcoins, but there are methods for laundering the Bitcoins themselves. “Tumblers” are the name of those services. They work on principles similar to the ones used by traditional money laundering services. Tumblers take stolen coins or fractions of them and re-introduce them, but with completely different fractions of completely different Bitcoins. Fortunately, this service is not flawless either. According to Gorup, illegally acquired Bitcoins most of the times are replaced with other stolen Bitcoins.

 

Following these events a thread on Reddit was created in order to find the ones responsible for this heist. The participants of the mentioned thread and Tom Gorup claim that the Bitcoins are not completely lost. They believe that it is possible to track down coins going through tumblers using BlackChain.

 

The fact that the heist was so successful might cause a real headache to the criminals. The more Bitcoins are stolen the harder is to launder them. If the criminals really have a botnet, it might become very useful.

 

Tom Gorup described a model which could have been used by the attackers in order to make the laundering of Bitcoins much easier. According to the security expert, a number of wallets with could have been created and spread through the botnet before the attack. The stolen Bitcoins were distributed among those wallets. If the attackers thought that these measures weren’t good enough, they probably implicated numerous tumbler services to complete the cleaning process of the Bitcoins. Although this method is complicated, with good preparation it becomes very effective.

 

At the beginning, nobody had a clue that such a vast amount of coins was lost. Sheep Marketplace’s representatives claimed that only a small portion of Bitcoins was lost. They believed that digital-currency disappeared due to an error made by a third party vendor. Nevertheless, it was soon clear that Sheep Marketplace was attacked, and the damage, which was done, was much greater.

 

Despite the fact that the recent events shook Bitcoin, Gorup doesn’t think that the heist has caused the drop of the exchange rate. As a matter of fact, five days after the theft, Bitcoins exchange rate was higher than ever before. According to Gorup, the following drop of value is natural because the owners of the currency started selling it. Having in mind that Bitcoin is a new currency, it is very likely that there will be a few more surges in the future until the value of it becomes relatively stable.

Events such as thefts of Bitcoins or the appearance of Bitcoin stealing and mining malware are becoming very frequent. Moreover, a new report has revealed that the foundations of the Bitcoin economy have significant breaches too. According to experts, these problems won’t be solved any time soon, as there is no institution which regulates the Bitcoin. The lack of regulation has another significant drawback. The victims of this heist are left alone, as no government institution will solve this crime.

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