Police investigating stolen laptops discover Bitcoin heist | Hacker News Reader

Police investigating stolen laptops discover Bitcoin heist

philly.com

They bust the guy for pawning a laptop he stole from his girlfriend's father for 150$. He claims to have $34.6 million in stolen BTC.

The article addresses this contradiction superficially-- the police say he couldn't access his BTC without being caught because the blockchain is public, and he didn't have time to "tumble" the coins.

But that doesn't really make a ton of sense. He didn't have the time or risk appetite to cash out any of his $34.6M but he had no problem breaking into his girlfriend's parent's house and pawning their laptop?

Oh also he was planning to fly out of town on a private jet with Jeremy Renner's passport?

I predict a retraction incoming.

Philly.com is garbage. It has no business being on HN.

Source: I live in Philly.

Sorry, it had the most detailed write up I could find. Here's a few other links about the story:

http://www.msn.com/en-us/money/markets/pennsylvania-police-h...

https://www.cryptocoinsnews.com/111212-2/

https://www.financemagnates.com/cryptocurrency/news/hacker-h...

It sounds made up. I wonder if this is some flimsy parallel construction cover, or they're railroading this guy to justify some new anti cryptocurrency legislation/policy Dhs is waiting to roll out.

This seems like a person looking for fame and validation. Arrested for such a minor crime why admit to major crimes. The fact that the specific charge is withdrawn tells me the facts may not backup his claim.

I agree that the claim is probably an empty boast, but depending on jurisdiction and heist mechanics, the laptop theft could be the more severely punished offense.

They may be using the local theft charges to hold him while they investigate it at the federal level. There's some other details I found on a msn.com article, not a good source I know, but it seems like he was trying to make the claim that he was working with or for someone else. Probably just a way to deflect attention but would also constitute a conspiracy charge if true and would have to be investigated:

"But within a few moments, Price switched his story, according to the affidavit. “Price stated that people hire him to do things for their companies,” the document stated. “Price elaborated stating he would write Trojan software to penetrate network systems.” He also told investigators “he had been hired by numerous foreign governments to develop penetration software.”

http://www.msn.com/en-us/money/markets/pennsylvania-police-h...

Paraphrasing previous comment - I get the "see cryptos are too insecure / it's a pyramid / it's a bubble / ICOs are scams / etc" arguments.

But holy shit turning a world currency into the wild west - for better or worse - is going to be disruptive, period.

I can only imagine the debacles that we have to look forward to, and I say that in full support of and as a long term believer in both blockchain and cryptocurrencies.

It's always the wild west when a technology or medium is new, isn't it? The same could be said of the web in the nineties or facebook/mobile apps a decade ago.

The nominal value at risk puts it in a different category.

There will emerge a "CryptoCurrency+ruleOfLaw" that will succeed in the evolutionary race.

All Ethereum contracts will incorporate the entirety of the relevant national, state, and local laws into their code.

I certainly don't look forward to auditing a Solidity contract with the complexity of the federal tax code.

Well, the coins have to come out of that wallet eventually, and you can trace where they go.. so.. I wonder if there will ever be any attempt by a government to extradite somebody based on stolen crypto.

That's not the case for every cryptocurrency, though. Some are untraceable.

At some point you have to turn your currency into something useful to you. I won't say that this is always traceable, but Bitcoin doesn't obviate the need for a fence.

Yes but the private currencies break the linkage between transactions. You turn the currency into something useful, and that's probably traceable to you, but nobody can tell where that currency came from.

Right, but the transaction that turns Bitcoin into another currency is traceable because someone needs to claim that currency, either via ETF into a bank account or physically going to pick it up.

Absolutely, and for Bitcoin that's a big problem for a thief. But for a private currency like ZCash or Monero, nobody can tell where the coins came from. They can't prove you stole them.

E.g. with one scheme, you destroy your coins and get a proof that you destroyed them. Later you can submit your proof to the blockchain and get new coins minted for you. But it's provably impossible to for anyone to figure out which coins you destroyed.

You could just spend them at a legitimate business though.

How do you redeem your goods and services without somehow tying it to yourself? For example, physical goods need to be shipped somewhere. There seems to be a limited number of things that you can spend your cypto-currency on that would not somehow be traceable back to an actual person, no?

Bitcoin can be tracked and a government could mandate that the bitcoins you use to buy a house be from the "legitimate" subset of bitcoins. With Monero, you can earn money from selling weed and turn around and buy a car with the exact same coins. Nobody can even ask you to prove where they came from, short of declaring them as income, (as with cash) but that becomes much harder when you can just fly to France, buy a house there (the government doesn't care if you paid taxes for that money in another country), and fly back.

Maybe we could just sticky this comment for every crypto thread.

It's interesting to see the objections change over the years. It used to be "bitcoin will never last past the year" to "bitcoin will never survive the next 30 years".

Guy gets caught on a low grade theft charge and just blurts out that he committed a litany of far more serious federal crimes? Someone sitting on 40 million dollars of bitcoin is out stealing cheap laptops from people he has relationships with? Someone with this degree of technical competence doesn't know to encrypt their devices or move assets to somewhere where they don't live? I call bullshit.

No they didn't discover a $40 million Bitcoin heist. It's all talk. Not a story.

The possible "value density" I.e value/physical matter of cryptocurrencies is unprecedented.

The value of Bitcoin relies on the entire network, which includes thousands of machines.

If you take that into account, then the value/physical matter of some bank account credentials is just about the same.

It's not because the credentials themselves are worthless, they dont have an inherent value. It's like value semantics vs reference semantics. And you can use bitcoin irl too.

Bitcoin has no inherent value. A private key has no inherent value.

It does in contrast with account info.

Your bank account credentials and your Bitcoin private keys are exactly the same.

Not really no. The hash has value on it's own. If you lose the bitcoin, you are fucked. If you lose your credentials, they might be recovered. Therefore bitcoin does store the value.

Legit explanation of bitcoin

Bitcoin is a digital currency, tied to no government, that can be exchanged for U.S. dollars and other national currency. It consists of a public ledger of all bitcoin in circulation and the transactions in which they are used. To own bitcoin, a user must possess two codes; a public key that identifies individual bitcoin, and a private key akin to the signature needed to write a check. To carry out transactions, those codes are passed between bitcoin wallets, where they are stored by users.

Let's have a look...

> and a private key akin to the signature

Nope, a private key is not akin to a signature. It's akin to a... key? Or perhaps a special pen / wax-seal that you use for signing? I don't think there is an exact analogy?

> To carry out transactions, those codes are passed between bitcoin wallets

Lol, nope. Private keys are not passed around. Neither the public keys (assuming they mean 'addresses' here), which are actually hashes of the public key.

Ordinary folk think it takes a signature for a check or credit card receipt to be valid. As far as they're concerned it's the same as a private key. It might sound ridiculous to you but it's closest from their perspective.

The article mentions "bitcoin tumbling" - is this actually effective? Does anyone know of any good resources to read up on the theory behind it?

It seems to me like it wouldn't work - you're basically just adding a single hop between the stolen coins and you...

No, cryptocurrency tumbling is usually not "a single hop".

Even if you consider the simplest case, address A (clean) and B (stolen) put their money into address C, and then split them into addresses X, Y, Z, you already can't tell where the stolen money went.

Now do that multiple times with randomly generated address, random amounts, it becomes indistinguishable from regular transactions. Everything blends together.

This brings up two problems based on the fact that very few people take the time to pay for and use a tumbling service unless they are trying to launder money:

1) Governments know that criminals use tumbling services, so there is a non-trivial chance that tumbling services are actually honeypots run by LEO's. If you think LEO's are not smart enough to think of this, consider freeway DUI checkpoints: a huge flashing sign across a freeway announces "Warning: DUI Checkpoint Ahead - Prepare to Stop." If you stay on the freeway, you'll notice that you never see any DUI checkpoint. The checkpoint was actually at the end of the first exit ramp after the sign - placed there to catch the fearful drunks that take the first exit after seeing the sign. (Frankly, I'm suspicious of publicly-available VPN's like StrongVPN for the same reason.)

2) Once your coins are tumbled with the coins of other criminals, the coins you withdraw from the service are associated not only with your own crimes, but also with the crimes of all the other criminals using the service at the same time.

Cool. I guess what I'm missing is why is there a need for the Tumbler service?

If I understand correctly, you can spin up many bitcoin wallets.

Wouldn't it be possible to create a bunch of Bitcoin wallets that would trade money amongst themselves?

(Or did I just re-invent the tumbler?)

Because

1) You need "clean" money to mix with, as in different from stolen.

2) Tumbler service is more fee-efficient, because they do it on a large scale, and can do many transfers in one transaction.

This all seems really fishy. Sounds like "Jeremy Renner" is just delusional.

What is the name of the wallet software he compromised?

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