Bitcoin core engineer loses more than 200 BTC to hack

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Bitcoin
Bitcoin core engineer loses more than 200 BTC to hack

Luke Dashjr, a founding member of bitcoin and a core developer, alleges that on Dec. 31, his PGP key was hacked. As a result, almost all of his bitcoin was taken from him.

The developer claimed in a tweet on Jan. 1 that the suspected hackers had acquired access to his PGP (Pretty Good Privacy) key. This popular security technique employs two keys to access encrypted data. He did not say how much of his BTC was taken. Instead, he revealed a wallet address where part of the stolen BTC had been transmitted.

The wallet address in issue now displays four transactions from 2:08 to 2:16 UTC on Dec. 31, totaling 216.93 BTC, or $3.6 million at the time of writing.

Dashjr claimed to have “no clue” how the attackers accessed his key. However, other community members have suggested a connection with a previous tweet from Dashjr on Nov. 17. He reported that his server had been infected by new malware/backdoors on the system.

In his most recent Twitter thread, Dashjr stated that he was aware of the current attack after receiving letters from Coinbase and Kraken regarding failed login attempts.

Reactions to the hack news 

Changpeng “CZ” Zhao, CEO of Binance, also took notice of the tragedy and expressed his sympathy and support in a post on Jan. 1. He added that he notified their security team to keep an eye on it. Binance’s CEO reassured that the exchange would freeze the transactions if they reach it.

Apart from CZ, some other crypto community members have hypothesized that the loss may have been caused by shoddy security.

The bitcoin developer may not have taken the Nov. 17 security breach “seriously enough,” according to a Reddit user going by SatStandard. They subsequently claimed that Dashjr “did not keep distinct operations isolated.” This came after another user expressed FUD amid the hack, based on the fact that it was a hack on a core developer, showing how vulnerable everyone was to these hacks.

Was the hack staged to evade taxes?

Others imply that it wasn’t a hack and that the seed word was accidentally discovered or involved in a “boating mishap” just in time for tax season.

In this context, the term “boating accident” refers to a recurring joke and meme about individuals trying to avoid paying taxes by saying they lost all their bitcoin in a “tragic boating accident,” which was first popularized by gun enthusiasts.

The announcement has also sparked a discussion about self-custody, which has been a hot subject since FTX’s demise last year.

BTC influencer Udi Wertheimer commented on social media that one should refrain from handling their keys and questioned if self-custody was a practical and secure choice. He also advised against managing keys directly.

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Brenda Mary

Brenda Mary is a crypto enthusiast and a graduate of The University of Nairobi in economics. Brenda’s passion brings her back to her elementary school years as a poet. She enjoys discussing blockchain technology and is committed to producing original content. Brenda also covers other rapidly developing markets and economic and cryptocurrency studies.