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Author Topic: Bitstamp hack. A real life test of anonymity in Bitcoin  (Read 2620 times)
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January 11, 2015, 10:55:41 AM
 #21

The hacker just needs time to turn the coins into fiat. In a few years no one really cares anymore. In the meantime he can split the 19k into thousands of smaller amounts, transfer, tumble, gamble, exchange to alt coins.

Does anyone still keep track of the stolen coins from the Sheep Marketplace?



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January 11, 2015, 11:58:07 AM
 #22

Have the user balances restored?

I had nothing there on hot wallet, so I wouldn't know. For everyone else, did BitStamp restored the stolen coins or everyone's balances are zero now?

why so serious...?
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January 11, 2015, 02:11:39 PM
 #23

Bitcoin theft is difficult to prosecute. Even if law enforcement tried to buy the coins from you at a localbitcoins deal they couldn't prove you were the thief even if they cared enough to try. Being in possession of the stolen coins does not prove you hacked into Bitstamp. There isn't even any proof that Bitstamp was ever hacked. You could claim they owed you the money and finally sent it to you and it's your word against theirs. You could claim whoever stole the money must have accidentally sent some of it to your address and you didn't know it was stolen. There is simply no way to prove the address holder is the thief after one transfer of the coins. At this point the coins have been transferred. Hope of finding the thief with proof positive is gone forever using just the coins address. They don't even need to be mixed to be usable. I've done lots of fast trades using LBC and no one has ever paused for a minute to look up the source of the coins or even at the description of the address on blockchain.info.

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January 11, 2015, 06:26:41 PM
 #24

There isn't even any proof that Bitstamp was ever hacked.

Exactly.  If we were to start treating these coins different from any others (e.g., by blacklisting them) then that provides an opening for all kinds of abuses (by those who might falsely claim "hack!" in an attempt to get the funds back or drive some other outcome.)
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January 11, 2015, 10:14:12 PM
 #25

Bitcoin theft is difficult to prosecute. Even if law enforcement tried to buy the coins from you at a localbitcoins deal they couldn't prove you were the thief even if they cared enough to try. Being in possession of the stolen coins does not prove you hacked into Bitstamp. There isn't even any proof that Bitstamp was ever hacked. You could claim they owed you the money and finally sent it to you and it's your word against theirs. You could claim whoever stole the money must have accidentally sent some of it to your address and you didn't know it was stolen. There is simply no way to prove the address holder is the thief after one transfer of the coins. At this point the coins have been transferred. Hope of finding the thief with proof positive is gone forever using just the coins address. They don't even need to be mixed to be usable. I've done lots of fast trades using LBC and no one has ever paused for a minute to look up the source of the coins or even at the description of the address on blockchain.info.
You selling the stolen coins may not be enough to prosecute someone for hacking Bitstamp however it may be enough for probable cause to get warrants to look into you further by law enforcement.

I assume that Bitstamp has some kind of logs of the hack, including the IP address of the computer(s) that were used to connect to their hot wallet. If a connection could be made between the computer(s) that were used to hack Bitstamp and you then it could be proven that you hacked them. This is especially true if law enforcement were able to find Bitstamp's private keys to their hot wallet or some other code to transfer their bitcoin to the address all the stolen coins were sent to

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January 11, 2015, 11:23:37 PM
 #26

Bitcoin theft is difficult to prosecute. Even if law enforcement tried to buy the coins from you at a localbitcoins deal they couldn't prove you were the thief even if they cared enough to try. Being in possession of the stolen coins does not prove you hacked into Bitstamp. There isn't even any proof that Bitstamp was ever hacked. You could claim they owed you the money and finally sent it to you and it's your word against theirs. You could claim whoever stole the money must have accidentally sent some of it to your address and you didn't know it was stolen. There is simply no way to prove the address holder is the thief after one transfer of the coins. At this point the coins have been transferred. Hope of finding the thief with proof positive is gone forever using just the coins address. They don't even need to be mixed to be usable. I've done lots of fast trades using LBC and no one has ever paused for a minute to look up the source of the coins or even at the description of the address on blockchain.info.
You selling the stolen coins may not be enough to prosecute someone for hacking Bitstamp however it may be enough for probable cause to get warrants to look into you further by law enforcement.

I assume that Bitstamp has some kind of logs of the hack, including the IP address of the computer(s) that were used to connect to their hot wallet. If a connection could be made between the computer(s) that were used to hack Bitstamp and you then it could be proven that you hacked them. This is especially true if law enforcement were able to find Bitstamp's private keys to their hot wallet or some other code to transfer their bitcoin to the address all the stolen coins were sent to
Those are pretty big assumptions. You could also say that if law enforcement found Bitstamps server in the trunk of your car they could prosecute you for theft. Chances are, if Bitstamp was really hacked, the hacker would not have been stupid enough to use an IP from his living room computer or put Bitstamp's server in the trunk of his car.

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January 11, 2015, 11:50:15 PM
 #27

they could easily launder those coins :-)

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January 11, 2015, 11:53:06 PM
 #28

they could easily launder those coins :-)

At bitlaunder.com ? Shocked
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January 12, 2015, 06:24:20 AM
 #29

Those are pretty big assumptions. You could also say that if law enforcement found Bitstamps server in the trunk of your car they could prosecute you for theft. Chances are, if Bitstamp was really hacked, the hacker would not have been stupid enough to use an IP from his living room computer or put Bitstamp's server in the trunk of his car.
You are right, they would probably use some kind of IP masking service (like, tor, VPN or hack their way into a SOCKS5 proxy, although the latter may allow you to be tracked to your "real" identity.

The hacker would obviously need to somehow have the private keys of bitstamp's hot wallet in their possession in order to sign and broadcast the transactions that sent their bitcoin to their bitcoin address. If those private keys are still somehow in the hackers possession then they would be implemented in the theft

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January 12, 2015, 01:23:21 PM
 #30

Those are pretty big assumptions. You could also say that if law enforcement found Bitstamps server in the trunk of your car they could prosecute you for theft. Chances are, if Bitstamp was really hacked, the hacker would not have been stupid enough to use an IP from his living room computer or put Bitstamp's server in the trunk of his car.
You are right, they would probably use some kind of IP masking service (like, tor, VPN or hack their way into a SOCKS5 proxy, although the latter may allow you to be tracked to your "real" identity.

The hacker would obviously need to somehow have the private keys of bitstamp's hot wallet in their possession in order to sign and broadcast the transactions that sent their bitcoin to their bitcoin address. If those private keys are still somehow in the hackers possession then they would be implemented in the theft

Yes, believing that a hacker would not at least attempt to hide his identity would be similar to a bank robber not wearing a mask. Even the dumbest bank robber wouldn't do that.

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January 12, 2015, 01:33:50 PM
 #31

He can mix his coins.
As the decentralized exchange came out, he can easy spend his bitcoin, then change it to other coins. and last change it to bitcoin back.
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January 13, 2015, 01:13:05 AM
 #32

The bigger challenge comes with the need to explain the money to the taxation authority which is certainly interested in where the money is coming from.

Depends on which jurisdiction the thief stays in.
There are some jurisdictions where personal income tax is 0%.  Grin
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