Bitcoin Forum

Source (in Ukrainian): http://mvs.gov.ua/ua/news/18175_Kiberpoliciya_vikrila_cholovika_u_vikradenni_elektronnih_koshtiv_z_kriptogamanciv.htm

My short summary:

The suspect worked in some unnamed crypto exchange based in Britain as tech support worker. He was targeting accounts of inactive users without 2FA installed, he was changing or adding recovery emails to those accounts, which allowed him to reset passwords and steal all user balance. The police estimates that he stole 720,000 UAH this way (~26,000 USD). The suspect was spending stolen money on gambling.

This should be yet another reminder to never store coins online for long term, and always use strong 2FA on your account and your email.

SAD news to those customers that are involved and also the suspect in question. Cold wallet still remain my favorite no matter how had they put pressure on me to send my coins to exchanges. Imagine customer funds be used by an insider not even a hacker, let him face the dirty part of the law and let him spend the rest of his life in jail.

Yeaah another incident that no one should store their coins on exchanges. And for 2FA, google authenticator or authy would be a great of help to at least the security for your funds.

Though it happened to an unnamed crypto exchange, we can take this too as a lesson that dont ever trust your fund with anyone even a trusted exchange can have this kind of employee.

I'm afraid that there is nothing that will help making people aware of that. Even if the existing crypto coiners stop using exchanges as online wallets, the newbies who enter the market will replace them and make the same mistake.

At the end of the day, the speculative side of crypto makes people less interested in self storage, especially when it comes to shitcoins. People rather use an exchange to store them than having to search for clients and do it themselves.

I do however have to point out that there have been a few clients released in the last couple of months that allow people to conveniently store even the most trashy coins themselves.

good thing that they caught him before he can rip other accounts
more then likely, he will try those active accounts if he finished those inactive ones.
remember he's into gambling. he wants more money...

the reason why i transferred my btc to my wallet, even if i really trusted my exchange
youll never know whats going to happen

He was so stupid that he thought he will get away from stealing from his own company, i am not sure what he was thinking that he could get away from stealing from inactive users. ::) he just ruined his career and life for his gambling addiction i suppose as he spent the stolen money for gambling. Always secure your coins and always use the second factor authentication at all time and never store your coins anywhere without you having the private key

Truth. And i would expand it and say that not only exchanges but any web/browser wallet for the exact same reason.

If you don't hold the keys yourself there is a fair possibility that you will have troubles in the future. Some way or another. In this case, sadly it was an internal enemy, not that easy to see coming. Reason why internal security and limited permissions for employees are key in industries.

Sure, some people will not learn, sometimes even after it happens to them, but still its worth bringing attention to this issue, especially with real world examples. I personally had horrible security when I started using Bitcoin, but after reading posts about people losing their coins to hackers, I've took a lot of measures, and I feel pretty secure and none of my accounts or wallets were ever hacked. Who knows what would have happened if I didn't visit this forum and other platforms and didn't read stories and advises, maybe I would have become a victim too.

true, but in this particular case 2FA was not preventing this man from stealing user's cryptocurrencies. he just chose those accounts without 2FA because it was more convincing to lie and say they were hacked compared to saying an account with 2FA was hacked!
the moral of this story is not to trust any exchange with your money. the coins are in their database and no matter what password and 2FA you choose they can still rob you.

A lot of people might say $25 000 is not a lot of money, when you compare it with the millions of dollars that were "hacked" in the past, but the damage incidents like this do for investor confidence is much more than the amount that was stolen. These third party services are supposed to secure the money/bitcoins that are stored on that platform and then we find that it is stolen by it's own employees. <inside jobs>

I will go as far as saying, a lot of other so-called "Hacks" was inside jobs too.  >:(

I agree that 2FA should be always enabled by users of exchanges this will add another security of your funds but enabling 2FA doesn't mean your cryptocurrencies are already safe, if the exchange you are using got hacked or planned an exit scam your funds can still be stolen, that is why never use exchanges for storing big amount of cryptocurrencies even the exchange is well known, but I'm just curious what exchanges are those he worked for. I don't want to click on the link of your source so I made my own research but can't found any similar to this. Anyway, good thing that this man gets caught already because it is possible that he will continue to do that.

not only in an online exchange but also on other accounts as well because this adds extra security to our account and hackers will be having a hard time to hack us but if a hacker is really dedicated they can still hack 2fa enabled accounts . they even hack an exchange which has a tripple security  . me myself isnt a fan of 2fa's because i dont usually store my cryptos online for a longer time . if ever i have some , those coins are still not expensive . so i guess hackers wont ever got interested on my account  .

Poor guy hehe.
This is exactly what happen when you trust someone else with your money. I have simple theory, when I need to trade any coin then I move them from my wallet to the exchange I want then once the trade done I move the coin back to my wallet. There are fees involved but at-least i feel secure that my coins are not going anywhere.

Cheers :-)

it is not just about "inside jobs" it is also about exchanges that scam you themselves! in other words I am talking about  cases that there were no hacks to begin with. it was the exchange itself scamming its users to make millions over night.
like those that closed and ran away, or like bittrex which overnight closed the accounts of thousands of users and took their money. they made millions overnight!

This is alarming considering that still many users and holders of cryptocurrencies are not knowledgeable about the goodness of using 2fa

And this is one best example to learn that we must not leave our cryptos for long always check the folios since things like this might happen to each of us

This must be addressed and may give actions fo us to continue trusting their sites for our cryptocurrency

Yes, in any case, if we store our cryptocurrency not in our wallet, there will always be the danger of it being stolen by various officials who will have access to them. Unfortunately, the security of our cryptocurrency will always be in doubt.
Such crimes are quite difficult to prove and solve. Law enforcement agencies of Ukraine worked well here, given that the investigation led the usual district police department of the city of Kiev.

hopefully things like this lead to more development of decentralized exchanges and also push people towards them because i believe that the future belongs to decentralization of everything specially exchanges where we trade decentralized cryptocurrencies.
and for them to become better, people have to use them more. and sometimes these types of incentive can help with that.

That's right the recent event on QuadrigaCX and these one is compelling reason that not just to store coins for long term, but not put all your funds in a exchange because we don't know that there are bad actors like the one reported here. It's more of an inside job, but the good thing is that the criminal was caught.

to be fair most people don't "store" their funds on exchanges they have them there because they are trading and they have no other choice to have them on exchanges for example when opening up a (buy or sell) order and waiting for it to be filled. and that is when they get hacked and lose their money or the exchange scams them and they lose money!

Hackers are one of the major problems why there are people who are afraid to enter in the cryptocurrency market. There are many skillful hackers nowadays so we should be careful in storing our bitcoins. Many more exchanges are continuing to be hacked, we should carefully choose best and reliable exchange that fit to us.

I think these kinds of information must be given to the newcomers and how are they are going to prevent this. And we should start investing in hard wallets like ledger in order to improve our security. I also propose that trading sites must require the 2FA and improve it a little more.

This just proves that hackers aren't always from the outside and some are working on the inside--mostly within a company's ranks. This also proves the point that no one should ever, ever leave huge balances on exchanges even with 2FA as some people from the inside can still alter some information and possibly withdraw your balance. Good thing they know that something's up and nabbed the criminal before he can even do things on a larger scale. Exchanges should also screen their employees very thoroughly and do random inspections during working hours to see whether they are doing something nefarious or accessing things they aren't allowed to.

Indeed true. That is why I installed 2fa in my mobile phone to secure all my accounts. This is a lesson for those who are unaware about google Authenticator with 2fa.
The suspect was dazzled with the huge amount of bitcoin. I pity those who were victims which they thought that their balances are still intact.

This is the problem with centralized exchanges. If the same is a decentralized exchange then the employ could have never got the access to the funds. Now, if it wasn't found people will be பின் the respective exchange as a fraudulent one due to one employee mistake. Recently Quadriga exchange closure too is mentioned as a drama to steal user funds, and it is getting common in cryptocurrency industry employees stealing funds of the customers.

Online wallets are always that scary ,anything can happen to it ,I've lost some satoshi to online wallets and since then I've always use paper wallet to store my funds ,I hope people learned from this

Storing your crypto online will ruin the security connected with the decentralisation of bitcoin. Just like with banks, it just takes 1 bad guy in a powerful position to ruin everything.

Gambling addicts will do anything to get their fix, this is a good example of that.
You can tell by the way he was scamming people, that he was being very careless. I mean, changing people's recovery e-mails and scamming individual customers is just bound to get out eventually.

In the grand scheme of things, $26k isn't all that much, I'm sure that the exchange would have no trouble paying back that amount of money.
Heck, they probably make that in under a week if they have decent trade volume.

It is good that the crime was revealed and the criminal was detained. I hope that soon police officers from different countries will be able to come up with a system for tracking stolen cryptocurrencies and the number of thefts will be much less. This will increase the attractiveness of cryptocurrency and will be able to stop the impunity of thieves. As far as I know, many countries are already trying to create systems for monitoring and tracking stolen funds. Of course, in parallel, it is necessary to improve the security of the crypto wallet and the security of the exchanges.

As we can see, in the near future, there is a lot of news related to the cryptocurrency theft.This is a very serious problem.And really, you can protect your assets as much as possible using 2Fa.I think this is the best option.I suppose I have never heard that someone was deceived using 2Fa.

I think that there are already a lot of similar stories that show us that you do not need to keep your money on the stock exchange. It's good that you published it here. I think it may be useful for many who are not yet aware of the security measures.

As it was silly for him to spend that kind of money on gambling. If I stole that much, I'd spend it on something useful. But either way, it's a good thing he got caught.

right, from this practical example, people can learn the importance of 2FA and the cons of keeping all the crypto on online wallet.

Ohh! He just ruined his career, I guess he spent the stolen money for trading or smth like this. So stupid.

this is a warning for us to always use the 2FA security in e-mail or others. thank you for the information, but we should not be silent with one security because from day to day the hackers began to look for loopholes to break into. at least there must be several other safeguards.

I have to say the following:

When someone goes to work somewhere where they will be responsible for other people's data and will be responsible for the safety of other people, that person must be someone honest and very professional. The company must supervise and audit its accounts and its workers so that it is seen that everything is well. I know people should also be careful, but let's give an example:

Imagine that someone does day trade in some exchange, the price does not choose time to rise or time to fall, so people become obligated and leave their coins in the exchanges. It is the duty of the exchange to protect the currencies of its customers, as well as the duty of a bank to protect people's money. If an exchange does not have the competence to guarantee the security of the people's currencies, then those exchanges must tell their customers that their clients must withdraw their funds and the exchange must close its operations

Looks like gambling addiction cause his criminal activity
Congratulation to UK Police to take that seriously
I am curious did he spent those money on bitcoin casinos
I agree it is bad idea to store coins on exchanges
We had last from  stories from Cryptopia ans Quadriga
 Quite big cmentarny of exchenges has been created  during last ten years

what do you expect from a criminal ? do good things like donating to charities and orphanage  ? no they wont do those things because those things can kill thier image  . stolen money will always be used for bad activities such as gambling ,  buying drugs and alcohol , paying for hookers , and other's alike  ... its not a good thing either if he already got caught because the money cant be recovered anymore  .

That's the scary part, people behind the exchanges should be the one helping us protecting our account, but sadly this one bad actor take advantage of the situation and chooses to be on the other side and be the bad guy. I guess we can't never stress enough the importance of 2FA and the funds you leave on a exchange, also it's a hassle to move funds around and cost you a few sats, but this precautions will really save you ass in cases like this. I used to work as Billing Operations Support, with access to lots of personal data but never in my mind did it crossed to steal for my own gain.

It doesn't really matter since he was caught. He's most likely going to get his properties seized and auctioned off to give back what he stole from his victims. I can understand his way of thinking because an addict doesn't predict the consequences he just acts. He needed to feed his gambling addiction so he chose to steal and now he's going to end up in jail. A tragedy if you think about it.

Why would anyone leave his exchange account with a balance on it without setting up 2FA that is beyond my thinking it is just flat dumb. By the way, I believe that all the exchanges so-called hacks are an inside job like this example we are seeing here nothing to be said can convince me anything else.

Stealing money for hes stupid vices,this man should be firing squad lol

But this is the best example that people here in crypto must learn the importance of 2fa and we must be aware of the possibilities of happening this same stealing from us

Thats why i never did put all my assets in crypto with single safety instead I scattered them all from different apps

Not only they need to supervise, they also should design their system to be more robust against inside jobs. Like, does a tech support really need the ability to change someone's reset email? I can imagine hackers impersonating users to trick even honest tech support workers into giving them access.

Great evidence to understand that our on line crypto storages are no longer safe and this should be considered as significant because majority of people don't use hardware wallets and most tends to store there cryptocurrencies in on line sites or in exchanges which is know to be very common but these exchanges often gets hacked by hackers so at the end holders loose there both money and time

this guy spent all of the money playing rigged ukrainian online casinos
I have no pity for him, he must be retarded
I wonder how in hell this ineffective cyberpolice managed to bust him, must have recieved a signal from their british colleagues
one more lesson: do not store your coins at an exchange
always transer them back to a cold storage after you finished trading

Bitcoin exists on the Internet, and there is no central bank to help you keep accounts. At the core, Bitcoin is based on cryptography. You have to rely on your own secret key to get money.

Each person has a unique key string. In fact, it is the only string in the whole world and universe.

Bitcoin networks only recognize "secret keys" and do not recognize people. The system does not have a phone number to retrieve, nor does it bind to an ID card.

So, when bitcoin is stolen, the secret key is actually stolen. After the hacker successfully attacked, the user's secret key was stolen.

Then use the user's password to transfer the user's bitcoin to his pocket.

So the question arises, how can a good secret key be stolen by hackers? Who should take the responsibility for losing the secret key?

First of all, it depends on who keeps the secret key. The custodian has a disadvantageous custody and loses the secret key. Naturally, it is the custodian's responsibility.

In general, the personal computer is attacked by hackers and the secret key is lost, which can only be considered unfortunate. Therefore, we are required to strengthen personal safety awareness.

Have you read through the news and the nature of fraud that happened or you just want to share your knowledge about the cryptograpy without knowing the nature of the fraud?? The nature of fraud being discussed here has no relation with cryptography and can be applied to your bank account as well to siphon out the funds. Please read the thread first!

This is a great case for 2fa because scammers can be internal so all they need to do is reset your password and they can empty your account

wow, its very bad news, we should know that the exchanger is not 100% safe, you should see that there are many bad people will steal because they see the value of the money. so my advice is dont save all of your money and cryptocurrency on 1 exchanger, you can try use many exchanger and wallet to prevent this thing happen

It's sad to know that the people lost their money because of this thief. It's funny to know that he thought he could get away so easily.
This proves that hackers are not the only ones who are keeping an eye on us. There are others as well who wait for the right time to steal your money.
It's better to be careful and use all the security measures to keep our money safe. A little irresponsibility could lead us loosing all our money.

If the cryptocurrency in Ukraine is not recognized as a payment instrument, according to Ukrainian legislation, it is not correct to call it “кoшти”. The same applies to the "oбмiнники", or am I wrong?

Good job by the authorities, but this dude can still leave jail with the money he stole if he hid it well - and there's nothing governments can do to return it to its rightful owners.
So make sure you always follow the best security practices!

In this story what surprises me most of all is the fact that having such brain, he spent on gambling! He might have joined some crypto project easily!

I don't know how many thefts have to happen for people to start thinking about the safety of their funds. But it is good that this man was arrested.

It doesn't take much intelligence to simply alter a database that you have direct access to. After all, he got caught, while a smart thief would leave no tracks.


An interesting question, I did some googling and it turns out that in the last year Bitcoin ceased to be a "money surrogate" according to the National Bank (https://jurliga.ligazakon.net/experts/74/784_bitcoin-oftsyno-perestav-buti-groshovim-surogatom). This doesn't mean that Bitcoin is legal, but it also stopped being "shady".

To my mind, in a crypto realm, we don't have an opportunity to rely on anybody in this realm. So, don't store coins on exchanges, use cold wallets and don't share any information regarding your passwords.

When something becomes more expensive, automatically there will be more emergence of hackers. These hackers will be completely focused on the way to enter into someone's wallet and get the funds out of the same. Though it is quite a hard thing, the lack of security enabling by users make them enter the wallet without much trouble.

He arrested last few months ago and that is consequences of they things they do. This means the team of the exchanges site will not trust 100 percent because that happen. Look like inside job. Setting 2FA is good because it can help to secure your account in exchanges site so if you don't set up just visit your exchanges site and set up 2FA. This means also we cannot trust even we know the person.

I have coins all over the exchanges, kucoin,bittrex,hitbtc. They were a total of $2k when I bought them since 2017. Now I am having a problem as my phone broke and the 2fa is not usable anymore. Hope this man did not get my coins there. Now I am contacting customer support to disable it and re-log in with another 2fa.

Well this should be a lesson that if you want to just store your crypto for a long term then don't trust the exchanges.
This is the reason why we have to keep our own funds in our own wallet.
There are ao many wallet that we could use why should we leave it at an exchange for a long time?

Nice law of Ukraine want to arrested people have stealing bitcoin and altcoin, will be more positive news for bitcoin could be legal transaction if have law and justice with bitcoin criminal and your asset will be safety.

It's kind of scary. There was no hacker involved but the employees themselves. It would seem that the exchange is very bad when it comes to hiring someone. Even the exchange themselves can't be trusted. Since he is targetting inactive users, those users are probably holder their assets in their exchanges which is something that you should never do. I hope justice serves him right.

So you think storing your coins on a wallet is considered safe ?  On hardware wallets yes because they are offline but if your only using online wallets no .  online wallets dont differ from exchanges because a hacker can always access your account and steal your coins  .  but its not bad to trust them if you know to your self that you are using a legit service/platform  .  i myself have been an avid user of online wallets ( several kinds of them )  but as of now i dont get experience to be hacked  .  

Scary stuff, glad it's taken seriously in the law though.
Hope that we move more towards decentralization, that'd be one way to make our "wallets" safer.

Hackers are finding a new way everyday to steal money from other's account. This person was targeting inactive account means noone was operating those accounts for long time, customers might be waiting for market recovery but such negligence of keeping funds in an exchange for a long time and that too w/o 2FA would definitely be harmful to the account. Its the user only who give hacker a chance to steam is account. Sometime user clicks on link from unknown resources and shares all his detail on that link and most of the time he does not cover his account with 2FA. If such small negligence are taken care of,we can save our funds.

I hope that kind of police duty will perform in every country. We don't have to avoid to store your bitcoin in your online wallet specially when you are holding coins for your future. But like you said it is very risky to stored it online. But I think when bitcoin are going to become decentralized our coin will become safer and I hope it may happen very soon.

Working at an exchange and he was only able to steal $26,000?  That is nothing compared to what these bigger exchanges are scamming.  Why does it seem like the big scammers always get away with it?

is 26.000$ not big enough a sum?
I bet if he could, he would have stolen more than that
and that must be a rhetorical question why does it seem like the big scammers always get away with it
not always and not all of them , but it is easier to catch someone who is just a petty thief rather than uncover a well planned operation