John Daghita Son to a USA service man Steals $40m from nation's bitcoin

[Accardo]

One of the weirdest crypto theft has just happened with the son of the CEO of CMDSS - a platform that was awarded a contract to assist USMS (Marshals Service) in safeguarding forfeited crypto assets. Few days ago the young son of Dean Daghita named John was insulted or called out as poor in a telegram group by a fellow threat actor named Dritan, in quest to show how rich he is to everyone in the group he made transfers worth more than $40m to a wallet address tied to the $90m+ US forfeited crypto assets managed by his Father. The question which is yet to be unveiled even by the crypto investigator who shared the news ZachXBT remains that nobody knows how the boy got access to the US crypto wallet under his dad's watch.

Below is a thread on X about the traces and the recorded chats of the boy being broke shamed by a fellow threat actor, and when he made the transfers.

https://x.com/zachxbt/status/2014685263327351116

[DeeppRockk]

One of the weirdest crypto theft has just happened with the son of the CEO of CMDSS - a platform that was awarded a contract to assist USMS (Marshals Service) in safeguarding forfeited crypto assets. Few days ago the young son of Dean Daghita named John was insulted or called out as poor in a telegram group by a fellow threat actor named Dritan, in quest to show how rich he is to everyone in the group he made transfers worth more than $40m to a wallet address tied to the $90m+ US forfeited crypto assets managed by his Father. The question which is yet to be unveiled even by the crypto investigator who shared the news ZachXBT remains that nobody knows how the boy got access to the US crypto wallet under his dad's watch. Below is a thread on X about the traces and the recorded chats of the boy being broke shamed by a fellow threat actor, and when he made the transfers. https://x.com/zachxbt/status/2014685263327351116

The actual technical question for me is why anyone would assume a government contractor was using anything remotely secure in the first place.

people are looking for a complex exploit when the answer is almost certainly just abysmal operational security.

We're talking about forfeited assets, which means a messy collection of different tokens that were probably managed through some god-awful manual process.
i'm telling you there was no 'hack'.

Best case, it was a single Ledger sitting on a desk. Worst case, and what I think is more likely, it was a hot wallet like Exodus on a family computer, with the seed phrase written on a piece of paper in a drawer.

the kid probably saw his dad access it a dozen times, so this isn't a failure of cryptography; it's a failure of basic procedure.

i'd bet they didn't even have a proper multi-sig configuration because it's 'too complicated' for their workflow.

The fact he could just open a wallet and send $40 million to prove a point on Telegram tells you everything.

There were no layers of security, just a single point of failure, and that point of failure was a person.
I may be wrong, of course.

[FortuneFollower]

Never saw a fumble that hard on the level of government-seized funds.

They will need hella amount of audits to regain what they lost there - the trust, the flow, and the "transparency" they are all talking about

[Accardo]

it was a hot wallet like Exodus on a family computer, with the seed phrase written on a piece of paper in a drawer.

the kid probably saw his dad access it a dozen times, so this isn't a failure of cryptography; it's a failure of basic procedure.

i'd bet they didn't even have a proper multi-sig configuration because it's 'too complicated' for their workflow.

The fact he could just open a wallet and send $40 million to prove a point on Telegram tells you everything.

There were no layers of security, just a single point of failure, and that point of failure was a person.
I may be wrong, of course.

In the part 1 of the recorded chat John screen shared an Exodus wallet with about $2.3m worth of Tron in it, which is close to what you you said, his dad was careless with things, more than anythingelse, he would pay for being careless with his responsibilities, I don't think he was careful at safeguarding the private keys, the boy accessed them very easily, and it won't be his first time of doing this, for coming up publicly to show the process and flash expensive watches on social media, the private keys may have been laying on a desk for sometimes. This also portrays a threat for the government runnning Bitcoin treasuries and handing the keys to a law maker, similar outcome could erupt after sometimes.

[SatoPrincess]

I read the news on X yesterday, but haven’t seen the supposed telegram recordings and chats. It’s crazy that he would steal millions from the US government, go online and brag about it, and think he is not going to get caught even after using an exchange address.

[melinoe]

I read the news on X yesterday, but haven’t seen the supposed telegram recordings and chats. It’s crazy that he would steal millions from the US government, go online and brag about it, and think he is not going to get caught even after using an exchange address.

Or he simply thought he wouldn't be punished for that.

Classic. I hope people like these would just disappear..

[coinlary]

wanted to ask what happened to multisig and why his father would be the only one managing it, but after reading the X post, it seems the father only managed altcoins (part of the forfeited altcoins, I guess).

I don't know much about altcoin multisig, but after researching, I noticed it has to be done through a third party like Safe, which is not a good idea, I guess again.

Still, it's quite outrageous to imagine how the son could access such funds.

[Dr.Bitcoin_Strange]

In the society of today, most youths and teenagers are living my pair pressure, they want to show off to impress their friends or to oppress them, that's what is happening in my country too, the children of some top government officials are exhibiting some bad character to oppress their pairs and they assume that they can get away with it, without also realizing that they are spoiling their parents image. I wonder how people will look at this man because of this incident, it will seem as if he is disclosing official information to his family instead keeping official things official.

[sokani]

The question which is yet to be unveiled even by the crypto investigator who shared the news ZachXBT remains that nobody knows how the boy got access to the US crypto wallet under his dad's watch.

I'm not drawing any conclusions, but it seems the US government used a standard wallet in storing the Bitcoin. That is the only way the boy could have easily stolen the seed phrase from the dad. If they had used a multisig wallet, where even if one of the private keys was exposed, it would have been practically impossible to steal the funds, and this wouldn't have happened. I hope we get more info about the theft.

[Yamane_Keto]

This kid has harmed his father's business, which may result in the termination of the USMS contract in safeguarding forfeited crypto assets

Best case, it was a single Ledger sitting on a desk. Worst case, and what I think is more likely, it was a hot wallet like Exodus on a family computer, with the seed phrase written on a piece of paper in a drawer.

I agree with you, this indicates that there were no multiple layers of protection or multi-sig wallet, likely a hardware wallet and may have kept the wallet seed somewhere at home, which the kid was able to access.

[Ruttoshi]

I believe that the man didn't hide anything from his son which was why he was careless with the wallet believing that his son wouldn't do anything stupid but look at it how his son's actions have put hin into a deep mess for not securing the nation asset properly.

This should be a lesson for majority of us who just keep our wallets in a computer in the sitting room because we trust our loved ones. Your wallet security lies in your hands and don't keep your seed phrase carelessly because you trust the people living with you in your house. Don't allow what people say affect you emotionally.

[Z-tight]

A good question to ask here is if his father was in on this or was the son able to pull this off solely on his own. It is crazy that the authorities can give sole access to just one person to control seized funds of such large amounts. What about a multisignature setup, or better transparency and vetting?

No wonder a lot of people believe that many incidences of hacks and funds being siphoned in centralized exchanges and other similar services could be nothing short of an inside job. This case right here kind of makes their point valid to a large extent.

[Byebyebtc]

The fact that he did this to prove that he is not broke, clearly shows you how bad peer pressure has flooded this generation lol

But don't just run into conclusion who knows wether his father has given him some information about his Bitcoin wallet, which made him have easy access to acquire it

[wozzek23]

A good question to ask here is if his father was in on this or was the son able to pull this off solely on his own. It is crazy that the authorities can give sole access to just one person to control seized funds of such large amounts. What about a multisignature setup, or better transparency and vetting?

No wonder a lot of people believe that many incidences of hacks and funds being siphoned in centralized exchanges and other similar services could be nothing short of an inside job. This case right here kind of makes their point valid to a large extent.

I think when you think of how he was doing it to brag to online strangers, I highly doubt his father would be included. But the real sad part is that, his father and him will be jailed for a good long while I am sure because of the issue.

The money will be recovered easily for sure, and USA would have lost nothing, but just because a small kid was bullied, he ended up ruining the life of a businessman father and his own youth as well. They will eventually get out, but they will never have a good life again, not like they used to.

[Yamane_Keto]

A good question to ask here is if his father was in on this or was the son able to pull this off solely on his own. It is crazy that the authorities can give sole access to just one person to control seized funds of such large amounts. What about a multisignature setup, or better transparency and vetting?

Details of what happened were shared via a private Telegram group where users tried to prove their wealth. A user named "Lick" shared an Exodus wallet screen showing a TRON address containing approximately $2.3 million.



If he was using the Exodus wallet and sharing his personal photo, he certainly did not have enough knowledge about hacking such wallets, and his father was careless in keeping it in front of him.