A Crucial Clue in the $4.5 Billion Bitcoin Heist: A $500 Walmart Gift Card (wsj.com) 70
Federal investigators spent years hunting for clues in the 2016 hacking of the Bitfinex cryptocurrency exchange, when thieves stole bitcoin now worth $4.5 billion. In the end, what helped lead them to two suspects was something much more quotidian: a $500 Walmart gift card. From a report: That card and more than a dozen others like it, including for Uber, Hotels.com and PlayStation, were linked to emails and cloud service providers belonging to a young Manhattan couple, Ilya "Dutch" Lichtenstein and Heather R. Morgan, according to a criminal complaint. Authorities arrested the couple after seizing $3.6 billion worth of bitcoin allegedly in their control -- the Justice Department's largest financial seizure ever. New details have since emerged about the investigation, in particular how it took advantage of not only advanced forensic tools but also the growing push to rein in crypto crime, including by the industry itself. The discoveries would have been less likely to happen around the time of the hack, when bitcoin was far outside the mainstream of the financial world.
Tumbler and "scary" (Score:3)
It's worth mentioning that they tried to pass their money through a cryptocurrency tumbler (AlphaBay) to hide who owned it.
Also this picture the police released of the scary devices they owned [wsj.net] to make them look like criminals is rather hilarious.
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Is the leather item at the top of the photo a Crypto Wallet?
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I have no idea why they put that there
mule? (Score:1)
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Right? These people don't strike me as being very intelligent. I wonder who the man behind the curtain is.
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My favorite theory is that Feds knew of this couple for a long time, they are just lackeys, and that the money actually belongs to Putin. The timing is such to tell Putin that US govt knows where your assets are hidden all around the world and if you really mess with Ukraine that in addition to the fakey sanctions stuff we will come for your personal fortune.
The Walmart card stuff is just a story to tell, maybe to scare the mules to talking since Putin might want to poison them with radioactive mouthwash t
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Very astute. When making your tinfoil hats is there any benefit to using more layers of thinner foil or should I use few uses of heavy duty foil? Also do you trust Reynolds-brand or are they compromised?
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It's just a 'for fun' theory, no extra Al required. Not everything on /. is life-and-death serious
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Putin isn't going to mess around for $4.5 billion. That's pocket money. That is, the amount of money you can pay to several people to keep them in your pocket.
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linked to their damn email
Yeah.
On the other hand, to launder a $4.5 billion haul (and maybe set up some plausible deniability), a few thousand invested in gift cards and then "dropped" in a few places to be found and spend would be a decent investment. Half a dozen cards traced to other, unrelated people would keep the cops heading down blind alleys for some time.
Gift cards are a serious problem (Score:1)
A Target gift card scam was used against my dad to bilk him for a pretty large sum, which he now needs for medical care. The record keeping by Target was dismal. My dad has Alzheimer's and thus was susceptible to scams. F U Target!
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A Target gift card scam was used against my dad to bilk him for a pretty large sum, which he now needs for medical care. The record keeping by Target was dismal. My dad has Alzheimer's and thus was susceptible to scams. F U Target!
If you get a phone call from anyone soliciting a payment in store gift cards, you automatically know it's a scam. In my tourist-heavy town a hotel manager had a man walk in one day wearing a stolen APS (electric company) uniform and present a bill that had supposedly been neglected and which "had to be paid immediately" usingTarget cards as the trace-free payment mechanism. Since the desk manager knew nothing anout how the hotel handled its utility payments, he meekly went through the exercise of buying Tar
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You could have some fun [youtube.com] with the scammers though.
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I don't do business wit
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The customer is the "Target"
Sounds like parallel construction (Score:3)
You have billions in bitcoin and you buy gift cads?
Sounds like parallel construction...becuase the government doesn't want anyone to know how they obtained the private key.
It's sounding more and more that Bitcoin was something that the NSA dreamed up, and that there's a weakness somewhere that the Feds know how to exploit.
how else to get the money out? (Score:1)
Re: Sounds like parallel construction (Score:4, Insightful)
It's sounding more and more that Bitcoin was something that the NSA dreamed up, and that there's a weakness somewhere that the Feds know how to exploit.
Occam's razor says no, they just used the fact that Bitcoin is pseudonymous, not anonymous. Every transaction is public, so it's easy to trace from start to finish. As soon as you buy something personally identifiable (e.g., anything mailed to you), the government can track it back. You can try to use a tumbler, but (a) that requires a trusted institution and (b) the government can trace through that with a warrant.
Occam's razor is bullshit (Score:2)
Occam's razor is bullshit. And when law enforcement is involved it's even more bullsihit.
The NSA compromising encryption? Occam's razor would have said no...but it happened.
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The NSA compromising encryption? Occam's razor would have said no...but it happened.
But Bitcoin is all done in public, isn't it? The transactions are public and the protocol is public. What could the government even do with secret knowledge?
If they compromised Bitcoin's encryption, they could grab back the stolen cryptocurrency, but that wouldn't help them identify who owned it. The only way to identify the owner is to track the transactions or hack their online storage (everyone's online storage?) to find out who has the right private key. But having a Bitcoin back door wouldn't help with
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What could the government even do with secret knowledge?
Transfer every single bitcoin into their own wallet?
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wtf is a gift cad?
Re:Sounds like parallel construction (Score:5, Funny)
You can buy them in Boston.
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You have billions in [stolen] bitcoin and you buy gift cads?
In this case, they sound like the gifts that will keep on giving ...
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You buy the gift cards with crypto, then sell them for cash. I assume it's a little more difficult with e-gift cards, but I've never tried.
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Except the highest value gift cards are what...$500? Amazon may have some bigger ones but I believe you can only get them direct from amazon.
So then what? You buy $100k of them = 200 'cards' but digital since otherwise you'd have to retrieve them.
Then what? You spend your days convincing strangers to give you 50-75% in cash? (gift card sites can get 80-90+% of value depending on type but any street trade...lol good luck)
Now you've made dozens or hundreds of transactions (and likely thousands of personal
Commonly used words (Score:1)
Quotidian is pretty much the exact opposite of quotidian. How antithetical.
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You'll be a hero if you lay quotidian down in a family game of Scrabble.
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WTF? (Score:5, Insightful)
If you steal billions of dollars, why would you remain in the country that is actively investigating the crime? Why wouldn't you be living in a beachfront mansion safely ensconced in a non-extradition country?
Re:WTF? (Score:5, Insightful)
If you steal billions of dollars, why would you remain in the country that is actively investigating the crime? Why wouldn't you be living in a beachfront mansion safely ensconced in a non-extradition country?
They didn't steal billions of dollars they stole crypto which at today's crypto-exchange prices would hypothetically be valued at billions of dollars. Until they found a safe way of converting those crypto tokens into cash they had absolutely nothing except for clear evidence they had committed a crime. Even if they could get those crypto tokens into small amounts in completely untrackable wallets they would still have difficulty converting them without crashing the market. They would also have great difficulty spending the money without attracting attention. Much of the crypto fraud which is ongoing uses the cover of other states which aren't going to prosecute (Russia, North Korea etc.) in order to be able to do the conversion that they do do.
Presumably their plan would be to move to that beachfront mansion after they had managed to get enough of the money converted to be sure they could afford it. Now it's too late.
Re:WTF? (Score:4, Funny)
Presumably their plan would be to move to that beachfront mansion after they had managed to get enough of the money converted to be sure they could afford it. Now it's too late.
Hi. I’d like to buy your multimillion dollar beachfront mansion. Do you take Target gift card?
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plenty of countries don't have extradition treaties with the US where they could easily utilise those bitcoins with absolute immunity. It was a dumb move to stay in the country.
In retrospect, you are 100% right. It would have been worth their while selling their stuff to a local pawn broker and hitch hiking to South America if that was what it took. Most people lack the initiative for that and criminals tend to be especially stupid (at least according to the sample we have - the ones that get caught, as opposed to the ones that get made "Prime Minister" or "45th President" or similar). They probably were afraid to load up on the debt they might have needed to do that. Be glad the
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I assume it's a different skillset that they don't have.
Example, a programmer does not necessarily mean you are good with setting up networking in an office, although both are in the IT field.
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Agreed, but we instead had to be subjected to possibly the worse rap video i've ever seen.
Playing devil's advocate (and assuming they actually are the ones behind the theft) them taking even millions of dollars to a country without extradition treaties is far more likely to get them discovered by locals, tortured, coins stolen, then killed.
Going somewhere with limited law enforcement is a double edged sword.
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they would still have difficulty converting them without crashing the market.
This is one part I disagree with. Sure if you try and unload all of them, or even a substantial portion of them at once, it would crash things. But $100,000/month would barely register. Hell, with $24B/month in BTC transactions you could "hide" quite a bit without ruffling too many feathers. But yeah, the rest of it... If I had that much ill-gotten "money", in whatever denomination/form, you can bet your ass I wouldn't be in the US for a nano-second longer than I had to be.
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Nah, around half of the defi hacks are getting away with it. It doesn't have anything to do with where you live, it has to do with how clever you are.
Do you have a source for that? Interesting comment. However:
a) "have got away with it so far" - they can still be caught since the record is on the blockchain forever.
b) we already know that Russians and North Koreans are getting away with it as long as they stay home - that's probably a large proportion of those that get away with it
c) is that proportion by value or by number of people? I bet loads of smaller frauds go under the radar because nobody cares.
I'm not yet ready to fully believe any statistics
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b) I don't think so. Any clever person can pull off a job like that.
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Until they found a safe way of converting those crypto tokens into cash they had absolutely nothing except for clear evidence they had committed a crime.
Which more or less proves that cryptocurrencies are actually worth about as much as Monopoly banknotes.
Crypto billionaires are in hiding ... (Score:4, Insightful)
If you steal billions of dollars, why would you remain in the country that is actively investigating the crime? Why wouldn't you be living in a beachfront mansion safely ensconced in a non-extradition country?
Once you publicize that you have billions in crypto your personal security is f*cked. A bigger thug than you will visit and demand you hand over your crypto wallet. And they may not be as gentle as the US gov't.
The only relatively safe approach is to lead a quiet upper middle class life discreetly funded by crypto. However as this case demonstrates doing so is not so easy, as Barbie might say, "laundry is hard".
Always Walmart Gift Cards (Score:2)
The $500 Walmart gift card is indeed of interest (Score:2)
because it's the only item of true value in this story.
True value (Score:2)
The $500 Walmart gift card is indeed of interest ... because it's the only item of true value in this story.
The "true value" of anything is what others will voluntarily trade for it.
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If only rare coins [bankrate.com] existed. Oh wait ... /s
The OP was using the word trade to IF mean both parties accepted the offers. Why do you think baseball cards have worth? Because a buyer and seller mutually agree on the worth.
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Re: True value (Score:2)
Really? So if I gave you $50 for a $1 bill it is then worth $50?
To me it was. But I'm not trading it back so now it's not. Maybe it's still worth $50 to you, but you'll have a hard time finding someone else who agrees with you.
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sentencing with bitcoin volatility (Score:5, Funny)
The Italian Job (Score:3)
This all reminds me of the 2003 remake of The Italian Job. Yes, they stole a bunch of gold but the problem with stealing that large amount of gold is trying to change it to something that you can use. You can't walk into a bank and change it into 5s, 10s, and 20s. Being that bitcoin is out in the public you definitely can't change it without someone noticing it unless you break it down to something less noticeable. You can try to send it through a bunch of accounts to break it up but then it's all tracked on the ledger. You could send it through a 3rd party exchange to convert it but again it'll be tracked there, being that it's part of the blockchain.
Stealing the bitcoin is the first half of the job. Trying to figure out how to actually spend it is the other half of the equation...
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Could they go to El Salvador and offload it onto unsuspecting Bitcoin enthusiasts?
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The only option is to mysteriously have a large donation appear for Amnesty International.
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When art imitates life (Score:1)
From Red Dead Redemption 2:
The game aint over... I aint played my final move.
Dutch speaking to (Arthur) Morgan
I would have guessed teenagers in a strip club (Score:2)
Running up an enormous and suspicious bill on a credit card that wasn't theirs.
Oh wait, that was somebody else who's been in the news and has been under investigation.