Cryptocurrency and crime describes notable examples of
cybercrime
A cybercrime is a crime that involves a computer or a computer network.Moore, R. (2005) "Cyber crime: Investigating High-Technology Computer Crime," Cleveland, Mississippi: Anderson Publishing. The computer may have been used in committing t ...
related to theft (or the otherwise illegal acquisition) of
cryptocurrencies
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It ...
and some of the methods or
security" \n\n\nsecurity.txt is a proposed standard for websites' security information that is meant to allow security researchers to easily report security vulnerabilities. The standard prescribes a text file called \"security.txt\" in the well known locat ...
vulnerabilities commonly exploited.
Cryptojacking
Cryptojacking is the act of hijacking a computer to mine cryptocurrencies against the users will, through websites, or while the user is unaware. One notable piece of software used for cryptojacking was Coinhive, which was used in over two-thirds ...
is a form of cybercrime specific to cryptocurrencies that has been used on websites to hijack a victim's resources and use them for hashing and mining cryptocurrencies.
According to
blockchain analysis Blockchain analysis is the process of inspecting, identifying, clustering, modeling and visually representing data on a cryptographic distributed-ledger known as a blockchain. The goal of blockchain analysis is to discover useful information about ...
company
Chainalysis, 15% of cryptocurrency transactions conducted in 2021 were involved in illicit activities like cybercrime,
money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdiction ...
and
terrorism financing
Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors.
Most countries have implemented measures to counter terrorism financing (CTF) often as part of their money laundering la ...
, representing a total of $14 billion.
Background
There are various types of
cryptocurrency wallet
A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often al ...
s available, with different layers of security, including devices, software for different operating systems or browsers, and offline wallets.
Novel exploits unique to blockchain transactions exist which aim to create unintended outcomes for those on the other end of a transaction. One of the more well known issues that opens the possibility for exploits on
Bitcoin
Bitcoin ( abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public di ...
is the
transaction malleability problem The transaction malleability problem is a vulnerability in blockchain which can be exploited by altering a cryptographic hash, such as the digital signature used to identify a cryptocurrency transaction. Transaction malleability is considered to b ...
.
Notable thefts
In 2018, around US$1.7 billion in cryptocurrency was lost to scams, theft and fraud. In the first quarter 2019, the amount of such losses rose to US$1.2 billion. 2022 was a record year for cryptocurrency theft, according to
Chainalysis, with stolen during 125 system hacks.
[Bambysheva, Nina; Santillana Linares, Maria Gracia]
"Over $3 Billion Stolen In Crypto Heists: Here Are The Eight Biggest"
Forbes; December 28, 2022. Retrieved January 7, 2023.
Exchanges
Notable cryptocurrency exchange compromises resulting in the loss of cryptocurrencies include:
* In 2015, cryptocurrencies worth were stolen from
Bitstamp
Bitstamp is a cryptocurrency exchange based in Luxembourg. It allows trading between fiat currency, bitcoin and other cryptocurrencies. It allows USD, EUR, GBP, bitcoin, ALGO, XRP, Ether, litecoin, bitcoin cash, XLM, Link, OMG Network ...
.
* Between 2011 and 2014, worth of bitcoin were stolen from
Mt. Gox.
* In 2016,
were stolen through exploiting
Bitfinex's exchange wallet, users were refunded.
* On December 7, 2017, Slovenian cryptocurrency exchange
NiceHash reported that hackers had stolen over $70M using a hijacked company computer.
* On December 19, 2017, Yapian, the owner of South Korean exchange Youbit, filed for bankruptcy after suffering two hacks that year. Customers were still granted access to 75% of their assets.
* In 2018, cryptocurrencies worth were stolen from
Coincheck.
* In May 2018,
Bitcoin Gold
Bitcoin Gold (BTG) is a cryptocurrency. It is a hard fork of Bitcoin, the open source cryptocurrency. It is an open source, decentralized digital currency without a central bank or intermediary that can be sent from user to user on the peer-to-pe ...
had its transactions hijacked and abused by unknown hackers. Exchanges lost an estimated $18m and Bitcoin Gold was delisted from Bittrex after it refused to pay its share of the damages.
* In June 2018, South Korean exchange Coinrail was hacked, losing over $37M worth of cryptos. The hack worsened an already ongoing cryptocurrency selloff by an additional $42 billion.
* On July 9, 2018, the exchange Bancor, whose code and fundraising had been subjects of controversy, had $23.5 million in cryptocurrency stolen.
*
Zaif in Bitcoin,
Bitcoin Cash
Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017.
In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV.
History
Sin ...
and
Monacoin stolen in September 2018
* Binance In 2019 cryptocurrencies worth were stolen.
* Africrypt founders are suspected of absconding in June 2021 with US$3.6 billion worth of Bitcoin
* PolyNetwork (DeFi) suffered the loss of US$611 million in a theft in August 2021.
* Japanese cryptocurrency exchange Liquid was compromised in August 2021 resulting in a loss of US$97 million worth of digital coins
* Cream Finance was subject to a US$29 million theft in August, 2021 and $130 million October 28, 2021.
* On December 2, 2021, users of the BadgerDAO DeFi lost around $118,500,000 worth of bitcoin and $679,000 worth of ethereum tokens in a front-end attack. A compromised API key of the
Cloudflare
Cloudflare, Inc. is an American content delivery network and DDoS mitigation company, founded in 2009. It primarily acts as a reverse proxy between a website's visitor and the Cloudflare customer's hosting provider. Its headquarters are in San ...
content delivery network account allowed injecting of a malicious script to the web interface. BadgerDAO "paused" all
smart contract
A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the re ...
s due to user complaints.
* On December 6, 2021, the cryptocurrency exchange BitMart lost around $135M worth of Ethereum and an estimate of around $46 million in other cryptocurrencies due to a breach of two of its wallets. Although BitMart stated that it would reimburse its clients, many BitMart clients have not received any money from the exchange as of January 2022.
* On December 12, 2021, users of VulcanForge lost around $135M worth of PYR due to breaches of multiple wallets. Partering centralized exchanges had been notified of the hack and they have pledged to seize any stolen funds upon deposit.
* On January 27, 2022, Qubit Finance (DeFi) lost around $80M worth of Binance Coin due to a flaw in the smart contract that enabled withdrawal of the said amount in exchange for a deposit of 0 ETH.
* In March 2022, the largest cryptocurrency theft of the year, in ether and USD coin was stolen from the
Ronin Network
''Axie Infinity'' is a non-fungible token-based online video game developed by Vietnamese studio Sky Mavis, known for its in-game economy which uses Ethereum-based cryptocurrencies.
Players of Axie Infinity collect and mint NFTs which represent ...
. Hacked nodes were finally discovered when a user reported being unable to withdraw funds. The heist was later linked to
Lazarus Group
Lazarus Group (also known by other monikers such as Guardians of Peace or Whois Team
) is a cybercrime group made up of an unknown number of individuals run by the government of North Korea. While not much is known about the Lazarus Group, resea ...
, a
North Korean state-backed hacking collective, by the
U.S. Treasury Department
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
.
[
* On September 20, 2022, Wintermute was hacked resulting in theft of . The company attributed the vulnerability to a service used by the platform that generates vanity addresses for digital accounts.][
]
Wallets
The ''Parity Wallet'' has had two security incidents amounting to 666,773 ETH
(colloquially)
, former_name = eidgenössische polytechnische Schule
, image = ETHZ.JPG
, image_size =
, established =
, type = Public
, budget = CHF 1.896 billion (2021)
, rector = Günther Dissertori
, president = Joël Mesot
, ac ...
lost or stolen. In July 2017, due to a bug in the multisignature
A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often al ...
code, 153,037 ETH (approximately at the time) were stolen. In November 2017, a subsequent multisignature flaw in ''Parity'' led to a lock-up of 513,774 Ether (about at the time) to be unreachable; as of March 2019, the funds were still frozen.
Energy
Notable cases of electricity theft to mine proof-of-work cryptocurrencies include:
* In February 2021 Malaysian police arrested six men involved in a Bitcoin mining operation which had stolen US$2 million in electricity
* Ukraine authorities shutdown an underground gaming and cryptocurrency farm in July, 2021, accused of stealing $259,300 of electricity each month
* In July 2021 Malaysian authorities destroyed 1,069 cryptocurrency mining systems accused of stealing electricity from the grid
* In May, 2021 UK authorities closed a suspected bitcoin mine after Western Power Distribution found an illegal connection to the electricity supply
Blockchains
Bitcoin
There have been many cases of bitcoin theft. , around 980,000 bitcoins—over five percent of all bitcoin in circulation—had been lost on cryptocurrency exchange
A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may acce ...
s.
One type of theft involves a third party accessing the private key to a victim's bitcoin address, or of an online wallet. If the private key is stolen, all the bitcoins from the compromised address can be transferred. In that case, the network does not have any provisions to identify the thief, block further transactions of those stolen bitcoins, or return them to the legitimate owner.
Theft also occurs at sites where bitcoins are used to purchase illicit goods. In late November 2013, an estimated in bitcoins were allegedly stolen from the online illicit goods marketplace Sheep Marketplace, which immediately closed. Users tracked the coins as they were processed and converted to cash, but no funds were recovered and no culprits were identified. A different black market, Silk Road 2, stated that during a February 2014 hack, bitcoins valued at $2.7 million were taken from escrow accounts.
Sites where users exchange bitcoins for cash or store them in "wallets" are also targets for theft. Inputs.io, an Australian wallet service, was hacked twice in October 2013 and lost more than $1 million in bitcoins. GBL, a Chinese bitcoin trading platform, suddenly shut down on 26 October 2013; subscribers, unable to log in, lost up to $5 million worth of bitcoin. In late February 2014 Mt. Gox, one of the largest virtual currency exchanges, filed for bankruptcy in Tokyo amid reports that bitcoins worth had been stolen. Flexcoin, a bitcoin storage specialist based in Alberta, Canada
Alberta ( ) is one of the thirteen provinces and territories of Canada. It is part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest Territo ...
, shut down in March 2014 after saying it discovered a theft of about $650,000 in bitcoins. Poloniex, a digital currency exchange, reported in March 2014 that it lost bitcoins valued at around $50,000.
In January 2015 UK-based bitstamp
Bitstamp is a cryptocurrency exchange based in Luxembourg. It allows trading between fiat currency, bitcoin and other cryptocurrencies. It allows USD, EUR, GBP, bitcoin, ALGO, XRP, Ether, litecoin, bitcoin cash, XLM, Link, OMG Network ...
, the third busiest bitcoin exchange globally was hacked and in bitcoins were stolen. February 2015 saw a Chinese exchange named BTER lose bitcoins worth nearly $2 million to hackers.
A major bitcoin exchange, Bitfinex, was hacked and nearly 120,000 bitcoins (around ) was stolen in 2016. Bitfinex was forced to suspend its trading. The theft was the second-largest bitcoin heist ever, dwarfed only by the Mt. Gox theft in 2014. According to ''Forbes'', "All of Bitfinex's customers,... will stand to lose money. The company has announced a cut of 36.067% across the board." Following the hack the company refunded customers. In 2022, the US government recovered 94,636 bitcoin (worth approximately $3.6 billion at the time of recovery) from the 2016 thefts of the Bitfinex exchange. By February 2022, the amount of bitcoin stolen was worth $4.5 billion. Two people were charged for the thefts.
On May 7, 2019, hackers stole over 7000 Bitcoins from the Binance Cryptocurrency Exchange, at a value of over 40 million US dollars. Binance CEO Zhao Changpeng stated: "The hackers used a variety of techniques, including phishing, viruses, and other attacks... The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time."
Thefts have raised safety concerns. Charles Hayter, founder of the digital currency comparison website CryptoCompare said, "It's a reminder of the fragility of the infrastructure in such a nascent industry." According to the hearing of U.S. House of Representatives Committee on Small Business on April 2, 2014, "these vendors lack regulatory oversight, minimum capital standards and don't provide consumer protection against loss or theft."
Ethereum
In June 2016, hackers exploited a vulnerability in The DAO to steal . Subsequently, the currency was forked into Ethereum Classic
Ethereum Classic is an open source, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a p ...
, and Ethereum, with the latter continuing with the new blockchain without the exploited translations.
On November 21, 2017, Tether
A tether is a cord, fixture, or flexible attachment that characteristically anchors something movable to something fixed; it also maybe used to connect two movable objects, such as an item being towed by its tow.
Applications for tethers include ...
announced that it had been hacked, losing $31 million in USDT from its core treasury wallet. The company has 'tagged' the stolen currency, hoping to 'lock' them in the hacker's wallet (making them unspendable).
In 2022, hackers created a signature account on a blockchain bridge called "Wormhole" and stole more than $300 million worth of ether.
Fraud
Josh Garza, who founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement
A plea bargain (also plea agreement or plea deal) is an agreement in criminal law proceedings, whereby the prosecutor provides a concession to the defendant in exchange for a plea of guilt or '' nolo contendere.'' This may mean that the defenda ...
that the companies were part of a pyramid scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
, and pleaded guilty to wire fraud
Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to defraud another, and are federal crimes there. Jurisdiction is claimed by the federal government if the illegal activit ...
in 2015. The U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against mark ...
separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of plus $700,000 in interest. The SEC's complaint stated that Garza, through his companies, had fraudulently sold "investment contracts representing shares in the profits they claimed would be generated" from mining. Garza was later found guilty of fraud and ordered to pay and begin serving a 21-month sentence commencing January 2019 by the U.S. Attorney’s Office District of Connecticut.
Following its shut-down, in 2018 a class action lawsuit for $771,000 was filed against the cryptocurrency platform known as BitConnect
Bitconnect (also spelled BitConnect and KimConnect; stylized ''bitconnect'', ticker code BCC) was an open-source cryptocurrency in 2016–2018 that was connected with a high-yield investment program, a type of Ponzi scheme. After the platform ...
, including the platform promoting YouTube channels. Prior fraud
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...
warnings in regards to BitConnect, and cease-and-desist orders by the Texas State Securities Board
The Texas State Securities Board is a Texas state agency headquartered in Austin, Texas.
The Board enforces the Texas Securities Act (TEX. REV. CIV. STAT. ANN. art. 581-1) and maintains programs for enforcement, registration of securities, regist ...
cited the promise of massive monthly returns.
BitConnect founder and promoters diverted $2 billion in investor funds into personally controlled digital wallets between 2017 and 2018, according to the US Securities and Exchange Commission. The scam purported to use a "crypto trading bot" for a guaranteed return on investment. In reality no such mechanism was implemented and a network of promoters was paid a commission to attract new investors. Lead promotor, Glenn Arcaro, pled guilty to criminal charges.
OneCoin
OneCoin is a fraudulent cryptocurrency scheme conducted by offshore companies OneCoin Ltd, based in Bulgaria and registered in Dubai, and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Gree ...
was a massive worldwide multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling t ...
Ponzi scheme
A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comi ...
promoted as (but not involving) a cryptocurrency, causing losses of worldwide. Several people behind the scheme were arrested in 2018 and 2019.
The cryptocurrency community refers to pre-mining, hidden launches, ICO or extreme rewards for the altcoin founders as deceptive practices. This is at times an inherent part of the cryptocurrency's design. Pre-mining refers to the practice of generating the currency before its released to the public.
FTX
FTX Trading Ltd., commonly known as FTX (short for "Futures Exchange") is a bankrupt company that formerly operated a cryptocurrency exchange and crypto hedge fund. The exchange was founded in 2019 and, at its peak in July 2021, had over one mi ...
and Alameda Research founder and CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especiall ...
Sam Bankman-Fried
Samuel Benjamin Bankman-Fried (born March 6, 1992), also known by the initialism SBF, is an American suspected fraudster, entrepreneur, investor, and former billionaire. Bankman-Fried was the founder and CEO of the cryptocurrency exchange FT ...
was indicted by the U.S. District Court for the Southern District of New York
The United States District Court for the Southern District of New York (in case citations, S.D.N.Y.) is a federal trial court whose geographic jurisdiction encompasses eight counties of New York State. Two of these are in New York City: New Y ...
in December 2022 and charged with commodities and wire fraud
Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to defraud another, and are federal crimes there. Jurisdiction is claimed by the federal government if the illegal activit ...
, securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in lo ...
and money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdiction ...
, as well as with violating campaign finance
Campaign finance, also known as election finance or political donations, refers to the funds raised to promote candidates, political parties, or policy initiatives and referendums. Political parties, charitable organizations, and political ac ...
laws.
Malware
Malware attacks
Some malware can steal private keys for bitcoin wallets allowing the bitcoins themselves to be stolen. The most common type searches computers for cryptocurrency wallets to upload to a remote server where they can be cracked and their coins were stolen. Many of these also log keystrokes to record passwords, often avoiding the need to crack the keys. A different approach detects when a bitcoin address is copied to a clipboard
A clipboard is a thin, rigid board with a clip at the top for holding paper in place. A clipboard is typically used to support paper with one hand while writing on it with the other, especially when other writing surfaces are not available. The ...
and quickly replaces it with a different address, tricking people into sending bitcoins to the wrong address. This method is effective because bitcoin transactions are irreversible.
One virus
A virus is a wikt:submicroscopic, submicroscopic infectious agent that replicates only inside the living Cell (biology), cells of an organism. Viruses infect all life forms, from animals and plants to microorganisms, including bacteria and ...
, spread through the Pony botnet
A botnet is a group of Internet-connected devices, each of which runs one or more bots. Botnets can be used to perform Distributed Denial-of-Service (DDoS) attacks, steal data, send spam, and allow the attacker to access the device and its co ...
, was reported in February 2014 to have stolen up to $220,000 in cryptocurrencies including bitcoins from 85 wallets. Security company Trustwave
Trustwave Holdings is an American
standalone business unit cybersecurity independent subsidiary and brand of multinational telecommunications company Singtel Group Enterprise. It focuses on providing managed detection and response (MDR), managed ...
, which tracked the malware, reports that its latest version was able to steal 30 types of digital currency.
A type of Mac malware active in August 2013, Bitvanity posed as a vanity wallet address generator and stole addresses and private keys from other bitcoin client software. A different trojan for macOS
macOS (; previously OS X and originally Mac OS X) is a Unix operating system developed and marketed by Apple Inc. since 2001. It is the primary operating system for Apple's Mac (computer), Mac computers. Within the market of ...
, called CoinThief was reported in February 2014 to be responsible for multiple bitcoin thefts. The software was hidden in versions of some cryptocurrency apps on Download.com
CNET Download (originally Download.com) is an Internet download directory website launched in 1996 as a part of CNET. Initially it resided on the domain ''download.com'', and then ''download.com.com'' for a while, and is now ''download.cnet.com' ...
and MacUpdate.
Ransomware
Many types of ransomware
Ransomware is a type of malware from cryptovirology that threatens to publish the victim's personal data or permanently block access to it unless a ransom is paid off. While some simple ransomware may lock the system without damaging any files, m ...
demand payment in bitcoin. One program called CryptoLocker
The CryptoLocker ransomware attack was a cyberattack using the ''CryptoLocker'' ransomware that occurred from 5 September 2013 to late May 2014. The attack utilized a trojan that targeted computers running Microsoft Windows, and was believed t ...
, typically spread through legitimate-looking email attachments, encrypts the hard drive of an infected computer, then displays a countdown timer and demands a ransom in bitcoin, to decrypt it. Massachusetts police said they paid a 2 bitcoin ransom in November 2013, worth more than $1,300 at the time, to decrypt one of their hard drives. Bitcoin was used as the ransom medium in the WannaCry
The WannaCry ransomware attack was a worldwide cyberattack in May 2017 by the WannaCry ransomware cryptoworm, which targeted computers running the Microsoft Windows operating system by encrypting data and demanding ransom payments in the Bitc ...
ransomware.
One ransomware variant disables internet access and demands credit card information to restore it, while secretly mining bitcoins.
, most ransomware attackers preferred to use currencies other than bitcoin, with 44% of attacks in the first half of 2018 demanding Monero
Monero (; Abbreviation: XMR) is a decentralized cryptocurrency. It uses a public distributed ledger with privacy-enhancing technologies that obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses tr ...
, which is highly private and difficult to trace, compared to 10% for bitcoin and 11% for Ether
In organic chemistry, ethers are a class of compounds that contain an ether group—an oxygen atom connected to two alkyl or aryl groups. They have the general formula , where R and R′ represent the alkyl or aryl groups. Ethers can again b ...
.
Unauthorized mining
Phishing
A phishing
Phishing is a type of social engineering where an attacker sends a fraudulent (e.g., spoofed, fake, or otherwise deceptive) message designed to trick a person into revealing sensitive information to the attacker or to deploy malicious softwar ...
website to generate private IOTA wallet seed passphrases, and collected wallet keys, with estimates of up to worth of MIOTA tokens stolen. The malicious website operated for an unknown amount of time and was discovered in January 2018.
Fraud factories
Fraud factories in Asia traffic workers to scam westerners into buying cryptocurrencies online.
Other incidents
In 2015, two members of the Silk Road Task Force—a multi-agency federal task force that carried out the U.S. investigation of Silk Road—were convicted over charges pertaining to corruption.[Sarah Jeong]
DEA Agent Who Faked a Murder and Took Bitcoins from Silk Road Explains Himself
, ''Motherboard'', Vice (25 October 2015). Former DEA
The Drug Enforcement Administration (DEA; ) is a United States federal law enforcement agency under the U.S. Department of Justice tasked with combating drug trafficking and distribution within the U.S. It is the lead agency for domestic en ...
agent, Carl Mark Force, had attempted to extort Silk Road founder Ross Ulbricht
Ross William Ulbricht (born March 27, 1984) is an American serving life imprisonment for creating and operating the darknet market website Silk Road from 2011 until his arrest in 2013. The site operated as a hidden service on the Tor network an ...
("Dread Pirate Roberts") by faking the murder of an informant. He pleaded guilty to money laundering, obstruction of justice
Obstruction of justice, in United States jurisdictions, is an act that involves unduly influencing, impeding, or otherwise interfering with the justice system, especially the legal and procedural tasks of prosecutors, investigators, or other gov ...
, and extortion under color of official right, and was sentenced to 6.5 years in federal prison. Former U.S. Secret Service agent, Shaun Bridges, pleaded guilty to crimes relating to his diversion of $800,000 worth of bitcoins to his personal account during the investigation, and also separately pleaded guilty to money laundering in connection to another cryptocurrency theft. Bridges were sentenced to almost eight years in federal prison.
Gerald Cotten
Quadriga Fintech Solutions was the owner and operator of QuadrigaCX, which was believed to be Canada's largest cryptocurrency exchange. In 2019 the exchange ceased operations and the company filed for bankruptcy with C$215.7 million in liabilit ...
founded QuadrigaCX in 2013, after graduating from the Schulich School of Business in Toronto. Cotten was acting as the sole curator of the exchange. Quadriga had no official bank accounts since banks at the time had no method of managing cryptocurrency. In late 2018, Canada's largest crypto exchange QuadrigaCX lost in cryptocurrency when the owner died; he was the only one with knowledge of the password to a storage wallet. The exchange filed for bankruptcy in 2019.
Michael Terpin, the founder and chief executive officer of Transform Group, a San Juan San Juan, Spanish for Saint John, may refer to:
Places Argentina
* San Juan Province, Argentina
* San Juan, Argentina, the capital of that province
* San Juan, Salta, a village in Iruya, Salta Province
* San Juan (Buenos Aires Underground), ...
, Puerto Rico
Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and Unincorporated ...
-based company that advises blockchain businesses on public relations and communications, sued Ellis Pinsky in New York on May 7, 2020, for leading a "sophisticated cybercrime spree" that stole in cryptocurrency by hacking into Terpin's phone in 2018. Terpin also sued Nicholas Truglia and won a $75.8 million judgment against Truglia in 2019 in California state court.
On July 15, 2020, Twitter
Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
accounts of prominent personalities and firms, including Joe Biden, Barack Obama
Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
, Bill Gates
William Henry Gates III (born October 28, 1955) is an American business magnate and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen. During his career at Microsoft, Gates held the positions ...
, Elon Musk
Elon Reeve Musk ( ; born June 28, 1971) is a business magnate and investor. He is the founder, CEO and chief engineer of SpaceX; angel investor, CEO and product architect of Tesla, Inc.; owner and CEO of Twitter, Inc.; founder of The ...
, Jeff Bezos
Jeffrey Preston Bezos ( ;; and Robinson (2010), p. 7. ''né'' Jorgensen; born January 12, 1964) is an American entrepreneur, media proprietor, investor, and commercial astronaut. He is the founder, executive chairman, and former preside ...
, Apple
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus '' Malus''. The tree originated in Central Asia, where its wild ances ...
, Kanye West
Ye ( ; born Kanye Omari West ; June 8, 1977) is an American rapper, singer, songwriter, record producer, and fashion designer.
Born in Atlanta and raised in Chicago, West gained recognition as a producer for Roc-A-Fella Records in the ea ...
, Michael Bloomberg
Michael Rubens Bloomberg (born February 14, 1942) is an American businessman, politician, philanthropist, and author. He is the majority owner, co-founder and CEO of Bloomberg L.P. He was Mayor of New York City from 2002 to 2013, and was a c ...
and Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery ( Uber Eats and Postmates), pack ...
were hacked. Twitter confirmed that it was a coordinated social engineering attack on their own employees. Twitter released its statement six hours after the attack took place. Hackers posted the message to transfer the Bitcoin
Bitcoin ( abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public di ...
in a Bitcoin wallet, which would double the amount. The wallet's balance was expected to increase to more than $100,000 as the message spread among the Twitter followers.
In 2022, the Federal Trade Commission reported that $139 million in cryptocurrency was stolen by romance scam
A romance scam is a confidence trick involving feigning romantic intentions towards a victim, gaining the victim's affection, and then using that goodwill to get the victim to send money to the scammer under false pretenses or to commit fraud aga ...
mers in 2020. Some scammers targeted dating apps with fake profiles.
In early 2022, the Beanstalk cryptocurrency was stripped of its reserves, which were valued at more than , after attackers had managed to use borrowed in cryptocurrency to buy enough voting rights to transfer the reserves to their own accounts outside the system. It was initially unclear if such an exploit of governance procedures was illegal.
See also
*
* Computer security
Computer security, cybersecurity (cyber security), or information technology security (IT security) is the protection of computer systems and networks from attack by malicious actors that may result in unauthorized information disclosure, t ...
* Cryptocurrency bubble
Notes
References
External links
*
{{Cryptocurrencies
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Cryptocurrencies
Security
Cryptocurrency theft