[2018-11-10] Bitmain Sues Mystery Bitcoin Thief Who Hacked Its Binance Account

[Lmaooo]

Bitcoin mining giant Bitmain has filed a lawsuit against a mystery hacker who allegedly stole bitcoin from one of the firm’s cryptocurrency exchange accounts.

According to the suit, which the China-based Bitmain filed on Nov. 7 in the US District Court for the Western District of Washington, the unknown hacker infiltrated Bitmain’s Binance account in April and stole funds from the firm.

However, perhaps to better conceal their identity, the hacker did not just attempt to withdraw Bitmain’s funds to their own bitcoin wallet. Rather, they used the bitcoin to artificially inflate the price of small-cap cryptocurrency MANA, the native ERC-20 token of virtual reality platform Decentraland.

Spurred by the irregular trades, the MANA price rocketed from $0.12 to $0.34 on Binance in the span of less than an hour. Even more remarkable, the global MANA price rose to $0.20 — a gain of 40 percent — meaning that a hack involving a single cryptocurrency exchange account single-handedly raised the nominal value of the MANA cryptocurrency’s market cap by more than $80 million.

Presumably, this allowed the hacker to sell MANA they were already holding at inflated prices, and, significantly, they could potentially have liquidated the funds on one or more separate crypto exchanges since the Bitmain pump disrupted the worldwide MANA market.

The suit itself alleges that, as part of the hacker’s wash trading scheme, they transferred approximately 2.3 million MANA to Binance from Seattle-based cryptocurrency exchange Bittrex. It further claims that, “upon information and belief,” the hacker sent the bitcoin that they accrued through wash trading MANA back to Bittrex.

Bitmain claims, that, as a result of the scheme, they lost approximately 617 BTC, worth $5.5 million at the time of the hack.

Commenting on the suit in their weekly “Crypto Caselaw Minute,” lawyers Stephen Palley and Nelson M. Rosario explained that, despite the best efforts of the hacker, this “John Doe suit” will likely allow Bitmain to subpoena account information from Bittrex and Binance, which could ultimately divulge the identity of the thief.

They concluded:

    “What’s the lesson? It’s almost Captain Obvious territory folks: Stealing crypto from a centralized exchange leaves a lot of fingerprints. And your name doesn’t need to be known for you to get sued. Now that the lawsuit is on file, one assumes that Bitmain’s next step will be to issue subpoenas to Binance and other service providers, allowing it to identify the defendant.”

CCN | https://www.ccn.com/bitmain-sues-mystery-bitcoin-thief-who-hacked-its-binance-account/

[KryptoKai]

Unbelievable, how can someone hack into their binance account and not steal anything! Perhaps they are worried about not being able to withdraw without their 2FA code, so they simply pumped a coin which they were already hodling. Very smart

[rindo]

An unknown hacker managed to break into Bitmain's Binance account. That s already something extraordinary. According to Bitmain, the suspect could steal about 617 BTC.

It involves an amount of $ 5.5 million, or about € 4.9 million.

[Lucius]

Unbelievable, how can someone hack into their binance account and not steal anything! Perhaps they are worried about not being able to withdraw without their 2FA code, so they simply pumped a coin which they were already hodling. Very smart

An unknown hacker managed to break into Bitmain's Binance account. That s already something extraordinary. According to Bitmain, the suspect could steal about 617 BTC.

It involves an amount of $ 5.5 million, or about € 4.9 million.

Everything and everyone may be victim of hacking, Bitmain and their Binance account are no exception. Their account is hacked and hacker is use BTC to pump some shitcoin, and they succeeded in doing that. 2.3 miillion of Mana is sold for maybe even 0.34$ pumped price. By switching few exchanges hacker try to hide the traces, and since this is happens in April they did not catch him so far.

It is strange Bitmain need 7 months to raise the indictment against John Doe, that would only mean they just figure out 617 BTC is missing from their Binance account. I guess they have too much BTC to find that a couple of hundred are missing.

[Knabu]

This is quite a case. Esp where it says John Doe accessed a protected computer.... so perhaps and employee?  manipulated the sell and buy prices to artificially inflate the market. Here is the actual court filing: https://www.scribd.com/document/392698070/Bitmain-Lawsuit

[roosbit]

This is not your "average Joe" hacker! who hacks a centralized exchange like Binance and gets away with it looking at the amount of btc involved am sure KYC was done and probably their ip will also be used to locate them....but it certainly won't be easy to get someone of such a talent.

the good, the bad and the ugly part about centralization, in your face!

[darkangel11]

An unknown hacker managed to break into Bitmain's Binance account. That s already something extraordinary. According to Bitmain, the suspect could steal about 617 BTC.

It involves an amount of $ 5.5 million, or about € 4.9 million.

Enough to buy a boat and live on some island in the middle of nowhere for the rest of your days. Suing requires not only to know the personal details of the accused but you need to be able to execute the verdict. I know a lot of cases where somebody was ordered by the court to pay back the money and nothing happened. He had spent it, hidden it well, was living in a country where the police will turn a blind eye...

Based on how smart he played it with MANA, they'll never find him.

[stomachgrowls]

An unknown hacker managed to break into Bitmain's Binance account. That s already something extraordinary. According to Bitmain, the suspect could steal about 617 BTC.

It involves an amount of $ 5.5 million, or about € 4.9 million.

Enough to buy a boat and live on some island in the middle of nowhere for the rest of your days. Suing requires not only to know the personal details of the accused but you need to be able to execute the verdict. I know a lot of cases where somebody was ordered by the court to pay back the money and nothing happened. He had spent it, hidden it well, was living in a country where the police will turn a blind eye...

Based on how smart he played it with MANA, they'll never find him.

I really didnt even have the thought to think of that way which i can say it is indeed a very smart decision rather than pulling those BTC into that account
they do rather decide to pump up a certain shitcoin. Making up multiple transactions would really be hard to traced up.Just wondering on how those fellas able to breach up that Binance account.

It is strange Bitmain need 7 months to raise the indictment against John Doe, that would only mean they just figure out 617 BTC is missing from their Binance account. I guess they have too much BTC to find that a couple of hundred are missing.

Atleast they do care on their 617  Its better to be late than never.

[LeGaulois]

He wasted his time, a court won't do anything nor trying to search. And a hacker never uses his own IP as well or he was drunk. I suppose he did it just for the price or he has a kind of insurance. But the case doesn't worth to spend resource on to maybe find someone

[coolcoinz]

He wasted his time, a court won't do anything nor trying to search. And a hacker never uses his own IP as well or he was drunk. I suppose he did it just for the price or he has a kind of insurance. But the case doesn't worth to spend resource on to maybe find someone

Actually, it's possible to trace an IP, that is why TOR was created. Even if he uses TOR it's still possible with enough effort. The question is whether anybody will want to put so much effort into tracing a 5 million thief if it doesn't guarantee that he's going to be caught. Think about it like this. You have some guy in Albania, Bangladesh, or whatever country he was hacking from. You have to ask local authorities to track him down, and by the time you get his IP, the court warrant, contact authorities and get them to respond, he'll be long gone into another country with no extradition. Also, if he's really smart, he was using a public wifi, which would force the authorities to look for camera footage and witnesses. It's a lost cause.  

[Kemarit]

Unbelievable, how can someone hack into their binance account and not steal anything! Perhaps they are worried about not being able to withdraw without their 2FA code, so they simply pumped a coin which they were already hodling. Very smart

Hackers are smart people guys, we all know that. Strangely though, there are a lot of questions. Why did the hacker pump MANA though? How did the hacker/s know that its Bitmain's wallet? Why lawsuit not naming the hacker/s? Did they really get his information right? Let's see how Bitmain's subpoena to Binance goes, I'm sure that there are a lot of third parties going to be involved here so it going to be interesting if they can really identify those hacker/s in time. Well this happened in April so the hacker/s would have took off already to some countries to hide.

[stompix]

Unbelievable, how can someone hack into their binance account and not steal anything! Perhaps they are worried about not being able to withdraw without their 2FA code, so they simply pumped a coin which they were already hodling. Very smart

Hackers are smart people guys, we all know that. Strangely though, there are a lot of questions. Why did the hacker pump MANA though? How did the hacker/s know that its Bitmain's wallet?

Probably because he (they) was/were smart...
A withdraw would trigger some alarms but trades might not get attention if done slowly.

So he probably first got his hands on the account credentials bitmain used, remember that the account was compromised not binance security, he acquired a lot of shitcoins like this mana thingie and then started pumping it while selling in some other places for bitcoin or eth or any other coin.
https://coinmarketcap.com/currencies/decentraland/#markets
Lots of shady exchangeS in that list, especially UEX

So, good luck tracing them.

And I wonder why Bitmain choosed to fill the suit n the US, Binance has moved to Malta and they have quite a history of not disclosing info to the authorities. Maybe a move to scare them?

[Betwrong]

Now that the lawsuit is on file, one assumes that Bitmain’s next step will be to issue subpoenas to Binance and other service providers, allowing it to identify the defendant.

If exchanges will be cooperating there will be little difficulty in identifying the hacker. But even with all the personal details known it would be hard to actually jail them because, as @darkangel11 pointed out, there are places where the police can't reach you. ... Only those places are too boring to stay for the rest of your life, especially if you have millions of USD to spend. So it turns out that people like the hacker in question set themselves up for living in a luxury prison in constant fear of being transported to a not luxury one.

[squatter]

Now that the lawsuit is on file, one assumes that Bitmain’s next step will be to issue subpoenas to Binance and other service providers, allowing it to identify the defendant.

If exchanges will be cooperating there will be little difficulty in identifying the hacker. But even with all the personal details known it would be hard to actually jail them because, as @darkangel11 pointed out, there are places where the police can't reach you. ... Only those places are too boring to stay for the rest of your life, especially if you have millions of USD to spend. So it turns out that people like the hacker in question set themselves up for living in a luxury prison in constant fear of being transported to a not luxury one.

I’m guessing the exchange accounts will lead to a dead end — the KYC was probably done with documents acquired on the dark net market.

Good luck to Bitmain recovering anything here. The money was wash traded and withdrawn. It’s gone...

[fisheater]

Can people file lawsuit against a mysterious hacker? lmao.

[1BTC EQUALS 1CAR]

They won't find that hacker for sure. I bet that even before he did that, he already prepared everything so he won't be tracked by any special IT team of  any government. But I'm just worried if another hacking incident would finally lead to stealing all of the funds of Binance because I have 50% of my portfolio there.

[Betwrong]

Now that the lawsuit is on file, one assumes that Bitmain’s next step will be to issue subpoenas to Binance and other service providers, allowing it to identify the defendant.

If exchanges will be cooperating there will be little difficulty in identifying the hacker. But even with all the personal details known it would be hard to actually jail them because, as @darkangel11 pointed out, there are places where the police can't reach you. ... Only those places are too boring to stay for the rest of your life, especially if you have millions of USD to spend. So it turns out that people like the hacker in question set themselves up for living in a luxury prison in constant fear of being transported to a not luxury one.

I’m guessing the exchange accounts will lead to a dead end — the KYC was probably done with documents acquired on the dark net market.

Good luck to Bitmain recovering anything here. The money was wash traded and withdrawn. It’s gone...

That's how it would be done by criminal in a good movie, but reality is much simpler than screenwriters make it. Ross Ulbricht when looking for "the best and brightest IT pro in the bitcoin community to be the lead developer in a venture backed bitcoin startup company.", here on bitcointalk btw, was asking to send applications to rossulbricht@gmail.com.

https://bitcointalk.org/index.php?topic=47811.msg568744#msg568744

All of us can do mistakes, we are not perfect, and neither the criminals are. If FBI will launch an investigation I'm almost sure they will find the hacker in a month or two.

[squatter]

That's how it would be done by criminal in a good movie, but reality is much simpler than screenwriters make it. Ross Ulbricht when looking for "the best and brightest IT pro in the bitcoin community to be the lead developer in a venture backed bitcoin startup company.", here on bitcointalk btw, was asking to send applications to rossulbricht@gmail.com.

https://bitcointalk.org/index.php?topic=47811.msg568744#msg568744

All of us can do mistakes, we are not perfect, and neither the criminals are. If FBI will launch an investigation I'm almost sure they will find the hacker in a month or two.

That's possible, but I think it's a weak assumption. The Ross Ulbricht anecdote doesn't really apply, since he wasn't sending KYC documents to multiple companies he was planning to commit crimes through.

The darknet markets are rife with full ID packages that include everything you need to pass KYC on these exchanges. And they're cheap too. If you were trying to make millions of dollars in a scheme like this, most people would take this basic step as an insurance policy against being caught.

[Betwrong]

That's how it would be done by criminal in a good movie, but reality is much simpler than screenwriters make it. Ross Ulbricht when looking for "the best and brightest IT pro in the bitcoin community to be the lead developer in a venture backed bitcoin startup company.", here on bitcointalk btw, was asking to send applications to rossulbricht@gmail.com.

https://bitcointalk.org/index.php?topic=47811.msg568744#msg568744

All of us can do mistakes, we are not perfect, and neither the criminals are. If FBI will launch an investigation I'm almost sure they will find the hacker in a month or two.

That's possible, but I think it's a weak assumption. The Ross Ulbricht anecdote doesn't really apply, since he wasn't sending KYC documents to multiple companies he was planning to commit crimes through.

The darknet markets are rife with full ID packages that include everything you need to pass KYC on these exchanges. And they're cheap too. If you were trying to make millions of dollars in a scheme like this, most people would take this basic step as an insurance policy against being caught.

I agree. If they were planing the scheme from the very beginning, most likely they took all the precautions needed to avoid getting caught in the future. But, as is often the case, people come up with a fraud scheme years later after their registration somewhere. That's what happened to Ross Ulbricht, for example, he couldn't know he's going to run the biggest drug market on Earth at the time he was making his recruiting posts. As I said, we are not perfect, and I'm sure those hackers left traces somewhere.

[Zitudent]

Can people file lawsuit against a mysterious hacker? lmao.

I think Bitmain what to get information from the exchanges so that they can catch the hacker eventually.