News BITCOIN, Heists, Thefts, Hacks, Scams, and Losses

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The discussion highlights significant security issues surrounding Bitcoin exchanges, particularly focusing on the infamous Mt. Gox, which suffered a major theft leading to its bankruptcy. The exchange's management ignored critical warnings about its software's security flaws, resulting in millions lost and a tarnished reputation for Bitcoin. Other exchanges like Flexcoin and Canadian Bitcoins also reported substantial losses due to hacks and social engineering attacks. The conversation underscores the ongoing risks associated with Bitcoin transactions and the need for improved security measures in the cryptocurrency space. Overall, these incidents illustrate the vulnerabilities within the Bitcoin ecosystem that can lead to significant financial losses for users.
  • #91
Gosh, you mean that there was criminal activity centered around Bitcoin? How can this be?
 
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  • #92
In slightly old news, Bitcoin is trading at about a third of what it did at its peak.
 
  • #93
Vanadium 50 said:
In slightly old news, Bitcoin is trading at about a third of what it did at its peak.
That just leaves more room for growth.
 
  • #94
Blockchain 51% attack on Bitcoin fork.

https://www.ccn.com/fools-gold-bitcoin-fork-faces-cryptocurrency-exchange-delisting-after-51-attack/
As CCN https://www.ccn.com/bitcoin-gold-hit-by-double-spend-attack-exchanges-lose-millions/ at the time, the attackers managed to steal an estimated $18 million worth of BTG from multiple cryptocurrency exchanges by using rented mining rigs to accumulate a majority of the Bitcoin Gold network’s hashpower. This allowed them to execute a double spend attack, through which they rewrote recent blockchain data to reverse payments and steal funds from exchanges.

https://www.coindesk.com/blockchains-feared-51-attack-now-becoming-regular/

Mining compute farms are being used to attack cryptocurrency exchanges using equipment designed generate coins. :nb)
 
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  • #95
I hope that Nigerian 'Prince' didn't invest in cryptocurrencies.

https://cointelegraph.com/news/nige...coins-disintermediation-is-a-critical-concern
In March, the Nigeria Deposit Insurance Corporation also warned Nigerian citizens against the use of cryptocurrencies, stating that they don’t recognize them as legitimate currencies. Adikwu Igoche, an NDIC executive, said that cryptocurrencies are not authorized by Nigeria’s Central Bank and consequently aren’t insured by them.
https://www.ccn.com/bitcoin-price-drops-to-new-yearly-low-at-3200-whats-causing-the-decline/
On December 14, following a fairly large sell-off from the $3,400 region, the https://www.ccn.com/bitcoin-price/ dropped to a new yearly low at $3,200.

As Bitcoin (BTC) declined in value, other major cryptocurrencies including https://www.ccn.com/tag/ethereum, https://www.ccn.com/tag/stellar, and https://www.ccn.com/tag/bitcoin-cash experienced large losses against the U.S. dollar, with BCH falling by more than 11 percent.
 
  • #98
russ_watters said:
If that's true, it's a colossally stupid security setup!

It's more likely possible criminal activity.
https://www.newsbtc.com/2019/02/05/...o-bitcoin-funds-could-it-more-than-a-mistake/
Furthermore, the researchers found that QuadrigaCX used highly deterministic wallets to manage client funds. These wallets would enable the exchange to generate millions of unique bitcoin wallet addresses from a single, original clustered wallet address. Zerononcense claimed that it had recognized one of such grouped addresses with the help of WalletExplorer.com, a service which is supposedly good at “address clustering.”
...
Therefore, it is likely that Quadriga was pitting traders’ positions against each other to fulfill deposit/withdrawal requests.

“QuadrigaCX did not have a designated hot or cold wallet to send the customer their funds,” wrote Zerononcense. “In specific, they were forced to aggregate funds from disparate, disorganized locations in order to ensure that the withdrawal was successful.”

Ethereum Cold Wallets Missing Too
Separate research shared by My Crypto CEO and Founder Taylor Monahan revealed a similar case for Ethereum. She shared QuadrigaCX’s three ether wallet addresses. Two of these wallets made huge withdrawals to addresses associated with other top exchanges such as BitFinex, ShapeShift, and Poloneix. Between 2015 and 2017, Quadriga had made withdrawal worth approx $22 million, adjusted according to ETH/USD rate change.

https://www.ccn.com/wheres-the-missing-150-million-crypto-exchange-quadrigacxs-fiasco-gets-weirder-with-new-research
Some of the main addresses of QuadrigaCX also reportedly sent outgoing transactions after the death of its CEO Gerald Cotten, which should not be possible if the CEO had full control over all of the firm’s wallets.

There are many parts of the QuadrigaCX narrative that are uncertain and as Kraken CEO Jesse Powell put it, unbelievable.
...
No definitive conclusions can be driven until the local police release its report on the exchange.

But, the details on the wallets or addresses linked to QuadrigaCX which have emerged in the past week have led analysts and investors to become skeptical about the current situation involving the exchange and its loss of $150 million and whether the $150 million existed in the first place.
 
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  • #99
https://www.adelaidenow.com.au/news/law-order/man-demands-answers-after-police-raid-damages-suspected-adelaide-drug-house-turns-to-be-cryptocurrency-mining-setup/news-story/bd936a9dd57eb7a0343908437232ec60

 
  • #100
TheBlackAdder said:
This thread should be called schadenfreude.
A little, yes. But more of a warning.
I'd rather have a visibly volatile deflationary store-of-value (which increases the value of your savings over the years) than a seemingly stable inflationary store-of-value (which halves the value of your savings over the course of 25 years, given a median inflation of 2.7%).
Are those my only two choices? I don't think I know anyone who uses money as a long term store of value.

...If so, I guess my answer would depend on how volatile. Bitcoin is so volatile, so new, and so technologically flawed that I don't think you can reasonably predict what its price will be in 25 years - you can't even claim to know whether it is inflationary, deflationary or neither (the volatility is much larger than the long term trend). The safest prediction for its value in 25 years is zero.
Bitcoin is not just some runaway code on thousands of computers. A vast community of computer scientists, cryptographers, engineers, etc. are working on it. It's not an experiment anymore like it was 10 years ago. Most skeptics seem to forget to imagine what's happening in the background. Occam's Razor; what's more likely? That all these Bitcoin exchanges and developers just happen to be created all over the world, separately, because of some scam?
Yes, that is the most likely. Stuff like that happens all the time. At one time there were more Beanie Babies in the United states than there were people - it had way more Believers than Bitcoin does. Through McDonalds they once sold 100 million of them in 10 days. Today when you donate them to charity they weigh the garbage bag and calculate the tax write-off value by the pound. Unfortunately you won't even be able to do that with Bitcoin.
 
  • #101
TheBlackAdder said:
Bitcoin protocol is a technology like TCP/IP; and I do not think anyone would agree if someone called TCP/IP vs. Beany Babies a fair comparison.
On that line of thought it is not the TCP/IP but the usage based internet tariff is what would be a fair comparison.

Well, that's still not accurate. That's still the price of a 'something'. Maybe that walk-based pocket-monster gathering (sorry, I forgot the details) would fit.
 
  • #102

Billionaire founder of crypto exchange Binance says he's 'poor again' after its luna holdings — once worth $1.6 billion — crashed and are now worth just $2,200​

https://finance.yahoo.com/news/billionaire-founder-crypto-exchange-binance-053545416.html

Binance's luna holdings were worth $1.6 billion in early April at the token's peak price. The coin traded at about $0.0001468 on Thursday.

Luna's value has plunged in the past two weeks.

Its implosion started when its sister token, terraUSD, lost its peg to the US dollar; the two tokens' valuations are tied to each other. When terraUSD's price fell, investors rushed to dump their holdings in a scenario similar to a bank run. TerraUSD's plunge, in turn, dragged down luna's price.

Easy come, easy go.
 
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  • #103
He must have a strange definition of "poor again".
Despite his comments, Zhao, 45, definitely isn't broke. Bloomberg estimated his net worth at about $14.8 billion as of Thursday.
 
  • #104
1653149742775.png

https://www.yahoo.com/now/terra-backers-delphi-digital-hashed-102816289.html
 
  • #105
How Crypto Disappeared Into Thin Air
When a currency’s value is based on belief alone, it’s liable to evaporate.
https://www.theatlantic.com/ideas/archive/2022/05/how-cryptocurrencies-defied-gravity/629926/
"Since November, something like $1.5 trillion in cryptocurrency value has been erased. Bitcoin and Ethereum, the market’s bellwethers, are both down about 60 percent from their peaks. And most strikingly, the so-called stablecoin Terra and its sister token, Luna, which together were valued at about $60 billion six weeks ago, imploded in a matter of days and are now essentially worthless," James Surowiecki writes.

"This huge sell-off of course raises a natural question: What happened? You can certainly point to potential culprits. Inflation and interest rates are rising—though cryptocurrencies were supposed to be hedges against inflation, and indifferent to what’s happening in the “fiat” financial world. Stocks are being sold off—though one of crypto’s big selling points was that it was supposed to be uncorrelated with other assets. But really, there’s a much simpler explanation: People’s faith in crypto wavered. And faith, not fundamentals, is what most of crypto’s value depends on."
It only had value as long as someone could convert to dollars (or real currency) sometime in the future.
 
  • #106

Siblings Accused of $124 Million Crypto Scam Ran Times Square Ad​

https://www.bloomberg.com/news/arti...f-124-million-crypto-scam-ran-times-square-ad
  • Brother and sister fined by SEC for fraudulent token offering
  • John Barksdale criminally charged by Justice Department
A pair of siblings made false statements about a cryptocurrency and defrauded thousands of mom-and-pop investors out of more than $124 million, according to a federal regulator.

Starting in June 2017, John Barksdale, 41, and his sister, JonAtina, 45, lied to investors about the Ormeus Coin and falsely promoted the token as being backed by one of the largest crypto mining operations in the world, according to a statement from the Securities and Exchange Commission. John Barksdale, a U.S. citizen living in Thailand, was arrested abroad on Tuesday for making false statements, according to a separate filing from the Justice Department.

‘Pure Gambling’ Prompts Wild Swings in New Luna Cryptocurrency​

https://www.bloomberg.com/news/arti...rompts-wild-swings-in-new-luna-cryptocurrency
  • Relaunched token was distributed to investors on Saturday
  • New token is still relatively ‘illiquid,’ market maker says
Terra’s new Luna token is taking holders on a wild ride just days after being distributed to investors who saw the value of their cryptocurrencies tied to the failed blockchain destroyed.
:oops: :rolleyes:
 
  • #107
As of this morning:
BTC-USD
Bitcoin USD		21,911.81-2,233.81-9.25%
ETH-USD
Ethereum USD		1,171.20-74.10-5.95%

https://www.marketwatch.com/story/b...ow-much-worse-a-selloff-could-get-11655124356
Bitcoin BTCUSD, -5.84% has slumped around 17% over the past 24 hours, trading as low as $20,889 on Monday night, according to Coindesk data, a level not seen since December 2020. Bitcoin is down more than 60% from its November 2021 high.

Ethereum ETHUSD, -6.31% fell more than 16% to around $1,099, also hovering at its lowest since December 2020.

Meme coin Dogecoin DOGEUSD, -2.56% lost 16%.

Also not helping sentiment were hints of industry panic. Crypto lending platform Celsius announced it was pausing all withdrawals and transfers amid “extreme market conditions,” as its CEL digital token plunged 50%. And shares of technology services group MicroStrategy MSTR, -25.18% slumped on worries a margin call may force it to sell bitcoins.

Ouch!
 
  • #108
I'm sure that they'll be fine once they settle down to the value of the assets backing them up. :oldtongue:
 
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  • #109
1655246796306.png
 
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  • #111
Astronuc said:
Cryptocurrency Bitcoin at an 18-month low.
MUCH more to the point is that it is WAY off (about 70%) of its high which was 7 months ago

EDIT: that is "18 month low" is not directly awful since a stock could be sailing along w/ little change and an "18 month low" could mean it's down 15% from its high. 70% down is a whole 'nother ball game.
 
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  • #112
  • #113
But
1655309059585.png
 
  • #114

Bubble-pop-disappointment.gif
 
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  • #115
Cryptocurrency is a refuge from inflation

And stonks only go up!

It's worth remembering that bulls make money, bears make money, but pigs get slaughtered.
 
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  • #116
1655344154614.png

I don't think this will end well for the President of El Salvador
 
  • #117
Bitcoin under $19K and ETH under $1000
 
  • #118
It's becoming itchy not to buy the falling knives, but I'd wait until Celsius and Tether bite the dust.
 
  • #119
On July 1,
BTC-USD
Bitcoin USD		19,541.29-246.87-1.25%

ETH-USD
Ethereum USD		1,114.69+18.23+1.66%
 
  • #120
Hackers pulled off a $620 million crypto heist by tricking an engineer into applying for a fake job and opening an offer letter containing spyware, report says
https://www.businessinsider.com/axi...fake-job-offer-letter-spyware-phishing-2022-7
Scammers used an elaborate fake job scheme to steal over $600 million in crypto from the online NFT-based game Axie Infinity, The Block reported Wednesday.

The hackers, who the US Treasury linked to North Korea's notorious Lazarus Group, posed as job recruiters on Linkedin and tricked a senior engineer at the game's developer, Sky Mavis, into going through "multiple rounds of interviews" for a position that did not exist, sources told the outlet.

They then sent the engineer a fabricated offer letter with "an extremely generous compensation package" that was laced with spyware, The Block reported.

Once downloaded, the hackers could access Axie Infinity's blockchain network known as "Ronin," where users transferred Ethereum-based digital currencies in and out of the game.
In the same article, there is a discussion of the virtual currency mixer Blender.io, which was used to obscure some of the stolen cryptocurrency.
"Virtual currency mixers that assist illicit transactions pose a threat to US national security interests," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said in a statement. "We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered."
Bloomberg has an article, Math Prodigy Whose Hack Upended DeFi Won’t Give Back His Millions, By Christopher Beam, May 18, 2022, 9:01 PM PDT It describes a hack by an individual who accessed a cryptocurrency exchange platform where he found a flaw or vulnerability, which he then exploited to steal millions of $ in tokens.

An 18-year-old graduate student exploited a weakness in Indexed Finance’s code and opened a legal conundrum about theft on the blockchain. Then he disappeared.

https://www.bloomberg.com/news/feat...orm-hack-rocks-blockchain-community#xj4y7vzkg

Indexed Finance is a cryptocurrency platform that creates tokens representing baskets of other tokens, like an index fund, but on the blockchain. The index platform was co-founded by Dillon Kellar.
Kellar and his team modeled Indexed on a type of index fund (like S&P500), using a mechanism called an "automated market-maker" to maintain the balance of underlying assets, as many DeFi platforms do. Unlike a traditional market-maker, the AMM wouldn't buy and sell assets itself; instead it would help the pool reach its desired asset balance by adjusting the "pool price" of component tokens to give traders an incentive to buy them from the pool or sell them into it. When the pool needed more of a particular token, its price within it would rise; when the pool needed less, the price would decline. This model assumed users would interact rationally with the protocol, buying low and selling high.
DEFI or DeFi = Decentralized Finance
The platform made its debut in December 2020, initially offering two index tokens: CC10, representing 10 of the top Ethereum-based tokens by market capitalization, and DEFI5, representing five top DeFi tokens. The project soon garnered a small but devoted following, including Day. He had a Ph.D. in theoretical computer science and a master's in financial engineering, for which h'd written a thesis on stock-market index portfolio optimization. Indexed aligned with his interests and his relatively low appetite for risk.

When Indexed went live, Andean Medjedovic, who goes by Andy, had just started working on his master's degree. He was on his way to finishing it in a year. He tended to do things quickly. He'd taken 10th grade math in elementary school, graduated from high school at 14, and cruised through his bachelor's in three years at Waterloo, one of Canada's top schools for math and computer science and the alma mater of Ethereum co-founder Vitalik Buterin. By fall 2021, Medjedovic had presented his master&'s thesis on random matrix theory and was planning to apply to Ph.D. programs.

Then, Medjedovic took an interest in DeFi, particularly the mechanics of AMMs.

After reading about Indexed on a forum, he pored over its smart contract and noticed a "mispricing opportunity" in the code - the instrument Kellar had worried might let users distort the pool's internal price calculations when new tokens were being introduced. He also saw it was possible to circumvent a safeguard limiting the size of certain trades within the pool. "At first, I didn't believe it," he said. He ran the calculations a few times, and, "on paper, it worked." He spent the next month writing a script to exploit the vulnerability.

One will have to read the article to read how Medjedovic pulled off the hack.

The article mentions,
The list of exploited crypto platforms is long and grows by the week: Wormhole, Cream Finance, Rari Capital, and many more. "There's a common saying in DeFi that there are two types of protocols," Day says. "Those that have been hacked and those that are going to be hacked."

Another take on the Indexed Finance hack
https://cryptobriefing.com/inside-the-war-room-how-indexed-finance-traced-its-16m-hacker/
 
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