[2018-01-31] Coincheck hackers trying to move stolen cryptocurrency

[bbc.reporter]

If the hackers did their research well, then they know they only need to trade their stolen XEMs for one coin. Monero. Once they do, there is no way anyone can trace them.

I reckon this might be a good time to start looking at Monero's price hehehe.



Robinson said such hopping among different cryptocurrencies was becoming more prevalent among cybercriminals trying to cover their tracks.

The coins that the hackers had taken made up around 5 percent of the total supply of XEM, the world’s 10th biggest cryptocurrency, according to trade website Coinmarketcap.

McDonald said the hackers were unlikely to try to spend anything close to all of the stolen cryptocurrency at once, because the “market simply couldn’t absorb that much”.

If the hackers successfully moved the coins to an exchange, they were likely to try to swap them into another cryptocurrency before transferring the coins back into a conventional currency, he said. That would make the funds difficult or near impossible to trace.

“I would assume that they are going to get away with some of the money,” McDonald said.

Read the full article https://www.reuters.com/article/us-japan-cryptocurrency-cybercrime/exclusive-coincheck-hackers-trying-to-move-stolen-cryptocurrency-executive-idUSKBN1FJ28Y

[gentlemand]

If the hackers did their research well, then they know they only need to trade their stolen XEMs for one coin. Monero. Once they do, there is no way anyone can trace them.

The hacker really only has one option - send the coins back for a ransom. Otherwise those coins are toast. There aren't many XEM exchanges. There aren't any XEM mixers. The coins are being tracked closely by the NEM foundation, Coincheck and plenty of individuals.

If the hacker offloads them OTC then the buyer has the exact same problem.

Not the cleverest coin to nick.

[richardsNY]

Not the cleverest coin to nick.

It doesn't really matter. If they use decentralized exchanges to convert XEM to BTC, and then BTC to XMR, they have done a pretty decent job at getting rid of their trail as much as possible. The only thing to end this theft is to do a roll back, but the XEM team said that this isn't an option, and I am happy with this since it allows circulation to progress naturally. And as pointed out by McDonald, and especially with the help of decentralized exchanges and XMR, I too believe that they are going to get away with it. It's the hard reality, and again a very costly lesson for people using exchanges to store funds. I however don't believe it was an actual hack -- no exchange leaves that much value in a hot wallet....

[gentlemand]

It doesn't really matter. If they use decentralized exchanges to convert XEM to BTC, and then BTC to XMR, they have done a pretty decent job at getting rid of their trail as much as possible.

The only possible way the hacker could break the link to the stolen coins would be via an exchange. That's the only place you can pool coins and withdraw other ones. None of the exchanges will touch these coins. They'll be frozen the moment they hit their wallets.

I don't think XEM is on any decentralised exchanges and I dunno how they work. If they pool funds, which is what the hacker needs, then that's no longer decentralised surely.

The only other way the hacker could sell would be OTC. The OTC buyer is paying for completely useless coins. It's possible the hacker could get something if the buyer is stupid and does no research. The coins themselves are effectively burnt unless they're sold back to Coincheck.

[richardsNY]

It seems that I jumped too soon on the conclusion-train without looking into what coins decentralized exchanges actually support -- XEM isn't listed on the main decentralized exchanges. So yes, you're right, if these coins won't get sold to an ignorant buyer, or sold back to Coincheck, the coins are indeed worthless. I just wonder, is it even legally allowed to buy the stolen (let's assume for now they are really stolen) coins back while investigation still in full process?

[gentlemand]

I just wonder, is it even legally allowed to buy the stolen (let's assume for now they are really stolen) coins back while investigation in full process?

Hmm. This is a very extremely interesting point.

Coincheck aren't fully legalised in Japan like other exchanges are but there must be rules around that. If there aren't perhaps this will inspire someone to create them.

With some piece of shit alt exchange in Panama it wouldn't even register. It's probably a very different matter in Japan.

Then again surely similar rules apply to ransomware and government agencies pay that.

[bbc.reporter]

If the hackers did their research well, then they know they only need to trade their stolen XEMs for one coin. Monero. Once they do, there is no way anyone can trace them.

The hacker really only has one option - send the coins back for a ransom. Otherwise those coins are toast. There aren't many XEM exchanges. There aren't any XEM mixers. The coins are being tracked closely by the NEM foundation, Coincheck and plenty of individuals.

If the hacker offloads them OTC then the buyer has the exact same problem.

Not the cleverest coin to nick.

If the hackers decide to go on that path then I hope they would be smart enough ask and for Monero payment hehehe. Bitcoin, although still the best as a store of value cryptocoin, is not as good for any kind of ransom anymore.

Exchanges are now willing to lock dubious accounts and mixers can also be closed down as what we saw with Bitmixer.

[RamonBTC]

If this issue will go cold sooner things might favor on the hackers itself. But I’m still suspicious how this happen without any accomplished from that company and that coincheck even have not registered on Japan Financial Agency. I’m not openly accusing the management for this but one or two people responsible for this is maybe an employee or former member of the team who build the coincheck system.