Tracking Stolen Crypto is a Booming Business (washingtonpost.com) 18
Crypto heists are becoming increasingly common, but forensic investigators are getting savvier at figuring out who is behind specific accounts. From a report: Paolo Ardoino was on the front lines of one of the largest cryptocurrency heists of all time. He was flooded with calls and messages in August alerting him to a breach at Poly Network, a platform where users swap tokens among popular cryptocurrencies like Ethereum, Binance and Dogecoin. Hackers had made off with $610 million in crypto, belonging to tens of thousands of people. Roughly $33 million of the funds were swiftly converted into Tether, a "stable coin" with a value that mirrors the U.S. dollar. Ardoino, Tether's chief technology officer, took note. Typically, when savvy cybercriminals make off with cryptocurrency, they transfer the assets among online wallets through difficult-to-trace transactions. And poof -- the money is lost. Ardoino sprang into action and minutes later froze the assets.
"We were really lucky," he said. "Minutes after we issued the freezing transaction, we saw the hacker attempt to move out his Tether. If we had waited five minutes more, all the Tether would be gone." Two weeks later, Tether released the money to its rightful owners. And after threats from Poly Network, the online bandit gave up the rest. The seizure pokes a hole in the long-held belief that cryptocurrency is impossible to trace. Cryptocurrency is computer code that allows people to send and receive funds, recording the transactions on a public ledger known as a blockchain, rather than retaining account holder info. Because of the lack of user data, cryptocurrencies like bitcoin have been hailed as a safe haven for criminal activity. Fueled by anonymity, the shadowy industry allows hackers, tax evaders and other bad actors to launder money secretively, outside of the traditional banking system. Online scammers made off with $2.6 billion in 2020, according to a Chainalysis report. That year, ransomware attacks more than quadrupled.
But forensics investigators are getting savvier at scrupulously mapping activity on blockchains and figuring out who is behind specific accounts. This has sparked a "novel cottage industry of data providers" who are able to track cryptocurrency accounts flagged for illicit activity, said Zachary Goldman, a lawyer at WilmerHale specializing in novel payment technologies. "That's never really been available before." Through tracking, agents have recouped stolen crypto funds in a handful of high-profile cases. In June, the Federal Bureau of Investigation seized the $2.3 million in bitcoin ransom Colonial Pipeline paid to hackers who infiltrated the company's computer network. Investigators used the blockchain to follow the flow of the ransom payment to track the perpetrators. In 2020, the crypto exchange KuCoin recovered almost all of the $281 million stolen by suspected North Korean hackers and refunded customers.
"We were really lucky," he said. "Minutes after we issued the freezing transaction, we saw the hacker attempt to move out his Tether. If we had waited five minutes more, all the Tether would be gone." Two weeks later, Tether released the money to its rightful owners. And after threats from Poly Network, the online bandit gave up the rest. The seizure pokes a hole in the long-held belief that cryptocurrency is impossible to trace. Cryptocurrency is computer code that allows people to send and receive funds, recording the transactions on a public ledger known as a blockchain, rather than retaining account holder info. Because of the lack of user data, cryptocurrencies like bitcoin have been hailed as a safe haven for criminal activity. Fueled by anonymity, the shadowy industry allows hackers, tax evaders and other bad actors to launder money secretively, outside of the traditional banking system. Online scammers made off with $2.6 billion in 2020, according to a Chainalysis report. That year, ransomware attacks more than quadrupled.
But forensics investigators are getting savvier at scrupulously mapping activity on blockchains and figuring out who is behind specific accounts. This has sparked a "novel cottage industry of data providers" who are able to track cryptocurrency accounts flagged for illicit activity, said Zachary Goldman, a lawyer at WilmerHale specializing in novel payment technologies. "That's never really been available before." Through tracking, agents have recouped stolen crypto funds in a handful of high-profile cases. In June, the Federal Bureau of Investigation seized the $2.3 million in bitcoin ransom Colonial Pipeline paid to hackers who infiltrated the company's computer network. Investigators used the blockchain to follow the flow of the ransom payment to track the perpetrators. In 2020, the crypto exchange KuCoin recovered almost all of the $281 million stolen by suspected North Korean hackers and refunded customers.
A fool and their money are soon parted (Score:2)
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But take 6 months...
Dogecoin taking a shit over last six months and bitcoin lower than it started 6 months ago, Etherium is doing ok though.
Stuff too volatile and toxic to me.
"Bitcoin Boomer" (Score:1)
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This is "news"? (Score:2)
I mean for the most popular crapcoins, _everything_ is right there in the BC forever. Sure, exchanges and mixers try to anonymize things, but that is basically over as they will need or already need to keep detailed records. And once a crapcoin is converted to real money, it is all over. Monero seems to be a special case for the moment, bit I doubt it will assure anonymity long-term. And I would not be surprised if a significant part of the anonymity it promises can be undone later.
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Crypto will never beat the mega-banks for untraceable money laundering. Automated transfers can cascade through a dozen accounts in half a dozen countries and end up in four different shell companies on three continents in an hour. Good luck to anyone trying to trace a transaction that goes from Bermuda to Lichtenstein to Singapore, splits in two with half going to Malaysia and the other half to Panama, and then splits again and ends up in Moscow, Geneva, Cairo and Tangiers. By the time they've executed
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Crypto will never beat the mega-banks for untraceable money laundering. Automated transfers can cascade through a dozen accounts in half a dozen countries and end up in four different shell companies on three continents in an hour. Good luck to anyone trying to trace a transaction that goes from Bermuda to Lichtenstein to Singapore, splits in two with half going to Malaysia and the other half to Panama, and then splits again and ends up in Moscow, Geneva, Cairo and Tangiers. By the time they've executed the search warrant to the bank in Bermuda the shell companies are paying it out, and it's cost the recipient 10-15% in fees. Money laundering is so profitable that US Treasury Secretaries retire from "public service" to run them for CitiCorp and Chase. Crypto is fine for little fish, but if you intend to move millions a month you need the services of the international bankers.
Banks cannot actually do untraceable money laundering. Not possible. Banks need to keep full, accurate records because they are allowed to keep money in electronic form and they could "create" money otherwise. Tracing transfers is easy, you just tell the bank to give you all the details, typically backed up by a court order, international warrant or request from the regulator. They then have a limited time to provide this information and they will provide it.
That said, banks can aid in hard-to-trace and har
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Tracing transfers is easy, you just tell the bank to give you all the details, typically backed up by a court order, international warrant or request from the regulator.
Sure, which is fine if you have a couple of weeks to get the court order/international warrant, and that's if no one in the system is running interference. Now that you've found where the money went when it left Bermuda you get to start the process all over again in Lichtenstein. A few months later when you get to review the records in Malaysia you run into the disposable shell companies, which may not even have financial records beyond the initial cost to set them up. Mossack Fonseca alone created over
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I suspect I'm preaching to the choir here. :-)
Sort-of. The thing is bank transfers can always be traced. The point where money can be laundered is when you leave the banking system and banks make it possible to leave the banking system at many different points all over the globe. So they contribute to setting it up, but they do not do money laundering themselves. Things used to be a bit different, where banks actually participated in the laundering themselves, but with current global regulation a bank doing that will find itself isolated pretty fast an
How can you steal pirate gold? (Score:2)
It's free money. The second you dipped your toes into the crypto currency sea, the sharks were going to come for it.
easy fix (Score:2)
Governments can just require citizens to report inventory and transactions of all cryptocoin. Anything else accessed from a country implementing this is illegal and can be seized or destroyed. No more circumventing the rule of law, everyone has to toe the line.
crypto... seriously why? (Score:2)
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Booming Business How?? (Score:2)
The blockchain literally translates directly into an accounting ledger. Forensic accountants have been tracing funds for decades. How is this a new and booming business? These people are just accountants, not "tech geniuses".
Also, isn't Tether a scam?
Tracking Crypto is a Booming (Failed) Business (Score:1)