Thursday, December 07, 2017

NiceHash probably stole $65+ million from their users

A recent event has highlighted the hardcore criminal character of the cryptocurrency world.

Up to yesterday, the world's largest shared cryptocurrency mining service was "NiceHash dot com". See that website to figure out that they announced a big hack. Their Bitcoin address was emptied. Some 4,700+ Bitcoins i.e. $65+ million were stolen.

The hackers used some very sophisticated "social" tricks, we learn. That sounds rather amusing. Global Crypto Press offers us reasons to think that the actual events behind this huge theft could be more predictable.

NiceHash was based in Slovenia. Who owned it?

OK, through the H-Bit brand, NiceHash was owned by Martin Škorjanc, the father of Matjaž Škoranc. Matjaž just happened to be arrested for cyber crime, even last year. In 2013, he was arrested for money laundering. He had created the 2010 "Mariposa botnet" which has infected up to 12.7 million computers during its peak. See his Darkode malware network termination and other "achievements". Hours ago, Matjaž has erased all the traces about himself on the Internet – Facebook, LinkedIn etc. – and he is probably flying to the Bahamas to enjoy his $65+ million now.

As a law-abiding citizen, I just find it shocking. How is it possible that this hardcore criminal was allowed to create another network of computers? Why hasn't the Slovenian police immediately arrested him and his father again once they began to manipulate with tens of millions of dollars using a computer network that simply should depend on some license because of the huge amounts of money it manipulated? And should the mastermind of a 2010 botnet that had infected 12.7 million computers be given such a license? Or his father that almost clearly wasn't the main "family member" behind the software?

I don't have any hard proof that it was an inside job but even without that, the existence of NiceHash is something that shouldn't have happened. It's a proof that in the key institutions of the cryptocurrency world, big fish of the criminal underworld are hugely disproportionately overrepresented, and I think that all these cryptocurrencies should be banned immediately by all civilized governments.

A fascinating aspect of the Bitcoin payment method is that you can easily look at the stolen money. All the 4,736.42868911 Bitcoins are still sitting at this address. The Bitcoin is called a "cryptocurrency" but it's as open as you can get. Imagine someone steals some physical gold. Will the public be able to watch the exact timing and doses of gold that the thief stole, and look at the gold how pretty it is in the thief's safebox? ;-)

If the thief wants to turn it into cash or real estate in the Bahamas, she will probably have to sell the Bitcoins. So the money will have to be transferred elsewhere. Where will they be transferred? You can follow the Bitcoin address page to learn something about the answer. Can't the FBI just watch where this $65 million is being sent and compare the recipient addresses with its databases? Unmask, investigate or ban at least all known institutions that will be linked with the recipients?

You know, because of the ability to look at these transactions, I just think that these particular 4,700 Bitcoins just cannot have the same value. The sender address is known to be a big fish criminal. So whoever gets the Bitcoins from this address is in trouble, too. That's not exactly crypto-.

But at this moment, it seems no one actually cares when someone steals $65 million. Meanwhile, because of some Amazon web site glitches, I am facing so far insurmountable hurdles in efforts to update my information at saying that I am not a U.S. taxpayer – in order to "legalize" some $3 a month from the Amazon associates program. Is it fair? Is it sane?

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