$6.3 billion in crypto stolen by hackers

[dishstaller]

This should hit a lot of folks with a dose of reality. I can only imagine how much more common this will get as AI progresses.

I read several stories on this and most are clear as mud. They say a lot of the stolen bitcoin has been "locked out" and that everyone will be made financially whole. I guess time will tell if either of these statements are actually true.

Hackers steal $6.3 billion from Binance in biggest-ever cryptocurrency theft

The company later added it began recovering assets impacted by the breach after pledging to cover losses using its Secure Asset Fund for Users.

www.cnbc.com

 

[harshness]

They say a lot of the stolen bitcoin has been "locked out" and that everyone will be made financially whole.

The "Secure Asset Fund" had about $1 billion in reserves... in Bitcoin.

The fund started in 2018, so it may take a while to make investors whole, much less replenish the fund.

 

[dishstaller]

The "Secure Asset Fund" had about $1 billion in reserves... in Bitcoin.

The fund started in 2018, so it may take a while to make investors whole, much less replenish the fund.

That's kinda what I was seeing but all the news reports are suggesting that all investors will be made whole immediately.
The other thing they weren't clear about was the BTC that was "locked out" of the system. I guess that means that the stolen BTC is basically worthless now because I don't see how it could be replaced....but there is a LOT about the crypto world that leaves me scratching my head.

 

[harshness]

This is what scares me about cryptocurrency: there doesn't seem to be any oversight.

It seems more like politics than investing.

 

[meStevo]

A few clarifications... the ~$3B "locked" was mostly stablecoins (USDT/USDC). Tether and Circle can blacklist their own tokens, which makes those worthless to the thief. Bitcoin and ETH have no issuer, so they can't be frozen. That's the ~$2.4–3.3B the hackers still have, so the stolen BTC is very much not worthless to them. It was also spread across 10 blockchains, not just bitcoin. On getting made whole: SAFU is ~15,000 BTC (~$1.2B), and Binance says it'll cover the rest from company funds. Analysts don't see it as a solvency problem, and withdrawals are expected back within days.

The attack was pinned on North Korea's TraderTraitor group via a compromised engineer laptop. Like many hacks and compromises, that's old-school social engineering, not AI.

This is what scares me about cryptocurrency: there doesn't seem to be any oversight.

It seems more like politics than investing.

That's the tradeoff stablecoins make - a central issuer that can freeze funds, which is why half the loot got stopped. Bitcoin and ETH have no one in charge, so nobody can reverse a theft, but nobody can freeze your coins either. Stablecoins trade price volatility for trusting a central issuer.

 

[dishstaller]

That's the tradeoff stablecoins make - a central issuer that can freeze funds, which is why half the loot got stopped. Bitcoin and ETH have no one in charge, so nobody can reverse a theft, but nobody can freeze your coins either. Stablecoins trade price volatility for trusting a central issuer.

Thanks....that fills in some of the missing pieces.
Why some of the money could be locked and the rest not was a gigantic hole is every story I read. I thought "well if they can lock up stolen BTC, then why couldn't they do the same thing to BTC that is used for ransom or some other illegal activity?". NOW I understand.
I miss the days when you could read a news story and now walk away with more questions than answers.

 

[Juan]

Where would you spend 6.3 billion in crypto without anyone noticing?..In today's digital world most countries are watching purchases over 10k

 

[dishstaller]

Follow up to the story. Binance says it has "plugged" 90% of the $6.3 billion with its own cash. Well, that leaves 10% or $630 million that is "unplugged". Are those folks just out of luck?

Binance Plugs 90% Of $6.3 Billion Hack Hole With Its Own Cash, Says Withdrawals Reopen Sunday<!-- --> | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[dishstaller]

Where would you spend 6.3 billion in crypto without anyone noticing?

They say it was North Korea so they'll probably just use it to buy things they need....oil, food, etc from nations and entities who don't care where the money comes from and since it is BTC...it can be spent anywhere with no blowback.

 

[Juan]

They say it was North Korea so they'll probably just use it to buy things they need....oil, food, etc from nations and entities who don't care where the money comes from and since it is BTC...it can be spent anywhere with no blowback.

Someone using AI would be able to see the purchase...plus if you were to buy a couple billion barrels of oil or any other commodity..someone would notice..or if you bought your own country

 

[telstar_1]

How does it have such billions simply "on hand" to replace stolen billions?

 

[harshness]

How does it have such billions simply "on hand" to replace stolen billions?

You "print" it, of course. That's part of the magic of cryptocurrency.

 

[meStevo]

They say it was North Korea so they'll probably just use it to buy things they need....oil, food, etc from nations and entities who don't care where the money comes from and since it is BTC...it can be spent anywhere with no blowback.

North Korea can't pay for oil with BTC. The money has to be laundered and cashed out first. Analytics firms can trace it on the public blockchain, and exchanges (including Binance) have frozen money traced back to prior hacks when it showed up. Much of it may still gets through eventually. It's just slow and lossy, not "spend anywhere."

Someone using AI would be able to see the purchase...plus if you were to buy a couple billion barrels of oil or any other commodity..someone would notice..or if you bought your own country

It can be traced, the rest of this is pretty much your usual nonsense though.

How does it have such billions simply "on hand" to replace stolen billions?

Binance has had an insurance fund since 2018, funded by 10% of trading fees. It's around $1.2B, and Binance says it'll cover the rest from company money. As the world's largest exchange, it makes a lot in fees. On top of that, the ~$3B in frozen stablecoins can be reissued by Tether/Circle, so the actual hole is smaller than the headline.

You "print" it, of course. That's part of the magic of cryptocurrency.

Nobody can print bitcoin, Binance included. Supply is fixed by the protocol. The only thing in this story that can be frozen and reissued is stablecoins, because they have a company behind them.

 

[reubenray]

They say it was North Korea so they'll probably just use it to buy things they need....oil, food, etc from nations and entities who don't care where the money comes from and since it is BTC...it can be spent anywhere with no blowback.

HA! That short/fat Dictator will buy more arms. He does not care about the people.

 

[dishstaller]

North Korea can't pay for oil with BTC. The money has to be laundered and cashed out first. Analytics firms can trace it on the public blockchain, and exchanges (including Binance) have frozen money traced back to prior hacks when it showed up. Much of it may still gets through eventually. It's just slow and lossy, not "spend anywhere."

Yeah, I read the same thing in multiple articles. However, when some type of hack takes place and a company's computer system is hit with ransomware, the culprits always demand BTC and those stories always say they want BTC because it is untraceable so the hackers are therefore never caught. It is contradictory crap like this that causes people not to believe any "official" statements when something like this takes place.

 

[meStevo]

Yeah, I read the same thing in multiple articles. However, when some type of hack takes place and a company's computer system is hit with ransomware, the culprits always demand BTC and those stories always say they want BTC because it is untraceable so the hackers are therefore never caught. It is contradictory crap like this that causes people not to believe any "official" statements when something like this takes place.

Bitcoin is pseudonymous, not anonymous; every transaction is public forever. Ransomware gangs ask for BTC mostly because it's easy for a victim to buy and can't be reversed, not because it can't be followed. The privacy-focused ones demand Monero instead.

The reason hackers often aren't caught is where they are, not the coin. If the wallet traces back to a group in Russia or North Korea, everyone can see the money and still can't arrest anyone. Traceable and catchable are two different things, and the media mashes them together.

 

[dishstaller]

The reason hackers often aren't caught is where they are, not the coin. If the wallet traces back to a group in Russia or North Korea, everyone can see the money and still can't arrest anyone. Traceable and catchable are two different things, and the media mashes them together.

Then doesn't that mean that NK can spend the BTC as it wants to or is there a way to flag the BTC, kinda like blacklisting an IMEI when it comes to cell phones.

 

[meStevo]

Operations returning to normal today as withdrawals are opening back up for Binance users.

Then doesn't that mean that NK can spend the BTC as it wants to or is there a way to flag the BTC, kinda like blacklisting an IMEI when it comes to cell phones.

Pretty good analogy actually. Bitcoin itself can't blacklist a coin since nobody runs the network. But the exchanges and cash-out points can, and do. Treasury publishes sanctioned wallet addresses (North Korea's included), and exchanges run every deposit through tracing tools. Coins traced back to a flagged wallet get refused or frozen.

So it's like a blacklisted phone: it still powers on, but no carrier will activate it. And just like those phones, the coins get shipped off to someone who doesn't check, in this case shady brokers who'll swap it for cash at a steep discount. NK can't walk up and buy oil with BTC, but after enough laundering, most of it does eventually turn into usable money.

Extending the analogy, if Bitcoin is an IMEI blacklist then stablecoins are like Apple's Activation Lock. The issuer controls it at the source, so once it's locked it's a brick everywhere. That's why the stablecoins in this hack got frozen within hours and the bitcoin didn't.