Police in Xi'an detained three hackers suspected of stealing virtual currency worth $88 million (600 million yuan). This is the largest criminal case of virtual currency theft in the history of the country.
The investigation began on March 30 this year. The police received a message stating that crypto currency had been stolen from a computer of a citizen named Zhang. The market value of the stolen digital currency at that time was about $14,5 million.
Previously, local police did not consider cases of this kind. This is the first case involving virtual currency in Shaanxi Province. Hackers divided the proceeds from selling the stolen virtual currency into smaller units and then conducted several transactions to hide their traces.
Within half a year the police managed to uncover the criminal network and eventually detain the suspects who hacked both personal computers of individuals and computers in companies. As a result, the illegal income of hackers reached $88 million.
The three detainees, presumably, studied the technology of hacking from the age of 12-13 years and later worked for major IT companies. The investigation is ongoing.
WHY IS IT IMPORTANT?
- This is the largest criminal case in the country on the theft of digital assets.
- Large theft of funds from investors can lead to stricter policies. Digital assets trading and ICO's holding are now banned in China.
This is not the first major theft in the history of digital currencies. Prior to this, various crypto companies have been attacked. For example, on July 20, 2017, ethereum network became the target for the attackers. As three large companies Swarm City, Edgeless Casino and Eternity confess, criminals managed to withdraw $31 million from their accounts. The first loss was noticed by employees of Swarm City.
They immediately notified ethereum developers about the vulnerability, who hired hackers and tasked them to return the funds. In the end, they used the same methods as attackers. Specialists removed funds from the wallets of hackers, using vulnerabilities in the system. This incident was resolved in less than a day.
Another big case occurred with the Bitfinex crypto exchange. In 2016, it was the largest trading platform. On August 4, unknown people abducted 119,756 bitcoins from customers' accounts, despite several levels of protection. Over time, it was found that the weak link that allowed for the theft of cryptocurrency was the vulnerability of multi-signature.
The Bitfinex security system runs on three keys. The company owns two of them, and the third key belongs to BitGo's partner. Only sharing these keys allows transactions. Experts assume that attackers stole the BitGo key. The company's leaders themselves claim that their servers have not been hacked. Funds were returned to users from Bitfinex's own pocket as the stolen bitcoins could not be found.
Bitfinex was also partly related to another crypto-theft. On November 19, 2017 unknown scammers accessed Tether’s portfolio, extracted the cryptocurrencies and sent them to an unauthorized bitcoin address. Many crypto experts criticized Tether's cooperation with the Bitfinex exchange and claimed that it was the reason for the theft.