South African Brothers Vanish, and So Does $3.6 Billion in Bitcoin (bloomberg.com) 77
A pair of South African brothers have vanished, along with Bitcoin worth $3.6 billion from their cryptocurrency investment platform. From a report: A Cape Town law firm hired by investors says they can't locate the brothers and has reported the matter to the Hawks, an elite unit of the national police force. It's also told crypto exchanges across the globe should any attempt be made to convert the digital coins. Following a surge in Bitcoin's value in the past year, the disappearance of about 69,000 coins -- worth more than $4 billion at their April peak -- would represent the biggest-ever dollar loss in a cryptocurrency scam. The incident could spur regulators' efforts to impose order on the market amid rising cases of fraud.
The first signs of trouble came in April, as Bitcoin was rocketing to a record. Africrypt Chief Operating Officer Ameer Cajee, the elder brother, informed clients that the company was the victim of a hack. He asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds. Some skeptical investors roped in the law firm, Hanekom Attorneys, and a separate group started liquidation proceedings against Africrypt. "We were immediately suspicious as the announcement implored investors not to take legal action," Hanekom Attorneys said in response to emailed questions. "Africrypt employees lost access to the back-end platforms seven days before the alleged hack." The firm's investigation found Africrypt's pooled funds were transferred from its South African accounts and client wallets, and the coins went through tumblers and mixers -- or to other large pools of bitcoin -- to make them essentially untraceable.
The first signs of trouble came in April, as Bitcoin was rocketing to a record. Africrypt Chief Operating Officer Ameer Cajee, the elder brother, informed clients that the company was the victim of a hack. He asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds. Some skeptical investors roped in the law firm, Hanekom Attorneys, and a separate group started liquidation proceedings against Africrypt. "We were immediately suspicious as the announcement implored investors not to take legal action," Hanekom Attorneys said in response to emailed questions. "Africrypt employees lost access to the back-end platforms seven days before the alleged hack." The firm's investigation found Africrypt's pooled funds were transferred from its South African accounts and client wallets, and the coins went through tumblers and mixers -- or to other large pools of bitcoin -- to make them essentially untraceable.
Ha (Score:5, Funny)
Ha.
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Is a Bitcoin "loss" anything like a "lost sale"? Asking for a friend. [piratebay.org]
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I'd say it's more like losing your TV to a thief. I think the difference in your comparison is that copying copyrighted works is illegal to protect the copyright holding and value. There is no way to quantify losses other than considering each copy as a loss of sale (i.e. a "stolen" copy).
If it's not required to register a digital e-coin wallet to the US government, then declaring it as a loss should not even be debatable yet. Otherwise it's going to be abused by IRS scammers. I can just start throwing arou
Re:Ha (Score:5, Funny)
It's like losing your TV to a thief although you bought the TV from a sketchy guy who said it fell off the back of a truck, and then you let another sketchy guy "hold it for you," who took off with it. Also the TV was made in a factory that uses slave labour and is powered by brown coal, bunker fuel, and gamers' broken dreams.
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Mod parent funny. Earned funny, in contrast to the FP fertilizer. (But also insightful.)
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The brown coal/bunker fuel/gamer dreams driven factories are already at maximum operation making crypto mining cards.
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More like losing your TV in the ocean then, the value is gone forever, not even the thief will get to enjoy it.
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If I mint a trillion tokens, sell one in April for $1 and someone uses 4 billion of them in a shady transaction, it's blindingly obvious that's not a 4 billion dollar 'loss'.
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Yes. They make you pay taxes on it if it gains money after all.
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lol, you said it. Just hilarious - at least to those who see bitcoin as a gambling joke.
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Cryptocurrency has always been just another money scam. It will only take a few more incidents like this to make that clear to even the drooling fanatics.
Re: Ha (Score:5, Insightful)
This shit happens all the time. Hasn't dented Bitcoin's popularity much. This is why the phrase "not your keys, not your coins" is a mantra in the cryptocurrency space.
The reality is you are handing over piles of cash to exchanges when you use them. Appropriate measures need to be taken to decide who to trust, just as you would need to take if you shipped hundred dollar bills to Tony for safe keeping.
If Tony is a representative of a financial institution with ties to FinCEN and you live under the global American banking regime, then you're pretty safe.
Now, I don't know if this Africrypt did all the things to become legitimate financial custodians, but I'm guessing not.
Caveat emptor.
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Hasn't dented Bitcoin's popularity much.
In other news Las Vegas is still a popular destination.
Re: Ha (Score:2)
Sure, but by buying Bitcoin, you become the house. Lot easier than buying a casino in Vegas.
Re:Ha (Score:5, Informative)
As Reanjr said, it happens all the time. There's hardly a month that goes by without a "bitcoin exchange/bank folds; turns out somebody in the company stole everything and is now missing".
I was actually moderated a troll by somebody when I pointed this out [slashdot.org] recently.
That said, Bitcoin isn't much of a currency, it's more of a commodity.
Theory of the case? Denmark smells better. (Score:3)
My theory of the case? It smells worse than a rotten Bitcoin in Denmark. And it's fun to speculate about the cause of the stink.
If the brothers were still around, then it would look like a typical case of incompetence leading to "stolen" Bitcoins. But in their absence, the situation looks much more interesting. Did they try to steal the Bitcoins? Are they stealing them now? Had they been gambling against the "value" of the Bitcoins? Perhaps to pay for electricity to waste in the quest for more Bitcoins? Or
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According to the summary they told their clients that hackers had stolen the bitcoins, but "don't tell the police! It would hamper our valiant efforts to recover your coins!" Sounds legit.
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Bwahahaha! (Score:1)
The incident could spur regulators' efforts to impose order on the market amid rising cases of fraud.
No. All these "coins" were developed specifically to not be part of the regular economy. They were to be outside the banking industry. Regulators should in no way intefere with this precept. Let the free market work (for once).
Re:Bwahahaha! (Score:5, Insightful)
Regulators should in no way intefere with this precept. Let the free market work (for once).
Regulators should interfere with 3rd parties who were entrusted with custody of property stealing said property -- Whether it is Gold bars, Stacks of Hundreds, or Bitcoins stolen make no difference.
Those 3rd parties as well have fiduciary duty to secure property they've been entrusted with -- the theft is because they fail to ensure appropriate controls.
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Regulators should interfere with 3rd parties who were entrusted with custody of property stealing said property
That is the job of the police, not "regulators".
We don't need new laws or new regulations to "protect" bitcoin speculators.
If you want a safe investment, you should put your money in T-bonds.
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That is the job of the police, not "regulators".
No.. it's not. The police have very little role in preventing offenses - it's in fact regulators' job. The police job is only to investigate crimes after they occured and secure evidence and likely perpetrators.
The regulators' job includes establishing rules businesses will be required to adhere to in order to protect the consumers and public interest.
It is against the public interest for businesses to be allowed to take money from the public to offer as an
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I was thinking more along the lines of, "not your keys, not your coins.
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What does that even mean? There is no market without regulation, some form of contract enforcement at least.
To say otherwise is like, 'hey, let's play football but without any pesky rules!' The game is created by rules. The law of the jungle is not a market.
the circulating supply (Score:5, Interesting)
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Re:the circulating supply [of stupidity] (Score:2)
Easy to answer. Because no one has yet figured out a way to regulate human stupidity. According to Einstein, they never will. At least I think that's implied by the quote about the infinity of human stupidity that Einstein is supposed to have made (but probably didn't).
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I bagged a lot of money in it. Might in the future. I never invest anything into bitcoin that I can't afford to lose.
It could be worthless tomorrow after all. I have a feeling that's what is going to happen. Here today, gone tomorrow.
There will be a guy somewhere that laughed all the way to the bank.
And its all marked... (Score:5, Interesting)
Sealing bitcoin is like stealing marked bills from a bank.
All of this bitcoin is now going to be persona-non-grata for any exchange in the world. As such its value is basically $0 to whomever holds it.
Such is the case for any blockchain currency that doesn't have anonymity as an intrinsic feature of the chain like Monero.
Re:And its all marked... (Score:5, Interesting)
All of this bitcoin is now going to be persona-non-grata for any exchange in the world.
That is not going to happen. A main selling point of Bitcoin is that anyone can transact.
If the system is changed to blackball some coins, that raison d'être is gone.
There are dark web exchanges and dark web tumblers that will transact with anyone.
But the brothers need to be careful. Many of the dark web exchanges/tumblers are false-flag operations run by law enforcement.
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The exchanges can choose to not do business with any bitcoin they damn well please ... that said, they have as of yet not committed to blacklisting all tumblers/mixers by default, so even when they blacklist an address it doesn't mean much yet.
Presumably at some point there will be a contagious blacklist by all the major exchanges, with any coins from a mixer automatically getting blacklisted ... wallets will start needing functions to detect tainted coins, it will become a giant mess.
Re:And its all marked... (Score:4, Informative)
The exchanges can choose to not do business with any bitcoin they damn well please
Correct. But there are many exchanges and tumblers. The thieves only need to find one willing to transact.
they have as of yet not committed to blacklisting all tumblers/mixers by default
They have no interest in making such a commitment.
Why should people invested in Bitcoin help to destroy the value of bitcoins?
it will become a giant mess.
It will be like the normal financial system. The whole point of cryptocurrencies is that they are different.
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To add to this with no way to re-inflate the money supply there will be just to much pressure to accept tainted coins. Even if various states make rules for business about accepting coins know to have been involved in crimes - than you are going to get into fun like well what was the crime. Was it a crime in our country, if not do we still reject it? when, why?
Bitcoin is fundamentally a failure when judged against ever initial promise it made, except not being somewhat independant of State manipulation -but
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Stealing bitcoin is like stealing marked bills from a bank.
Bitcoin enthusiasts hold two opposing and simultaneous points of view about this: that transactions are traceable through the blockchain, and that by using tumbler services transactions are ironclad anonymous.
With this much value at stake, we're about to see which observer's wavefront is the one that collapses.
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We don't know how many kneecaps were broken or how many people were disappeared though. Possibly everyone involved, including anybody traceable to any of the mixers used caught a bad case of CIA.
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We also don't know whether that represents only part of the ransom, or the whole thing devalued by market action since it was paid.
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As such its value is basically $0 to whomever holds it.
If you don't want those 3.6 billion dollars, I'll take them. May be I'll only offer you 30% or 50% of their value, but I will still take them. Worst case scenario, I carve the key & instructions on a stone and I bury the stone in my backyard (for either my grandchildren or for a perfect stranger to find). But by then, any statute of limitation will have run out.
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All of this bitcoin is now going to be persona-non-grata for any exchange in the world.
On behalf of Slashdot we congratulate you on reading most of the summary. You are already a winner, an above average Slashdot reader. It is unfortunate that you didn't manage to read the last 2 lines of the summary otherwise you'd get a gold star, instead you get awarded no points what so ever.
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LOL. Given how I was replying to a guy on thread level 0 what's your point? You may as well have said "I can't speak for everyone, but the sky is blue, what are we talking about again?"
Decryption (Score:2)
I guess they are both in someone's basement where the old piece of hose and a gas-torch is used to convince them to give up their passwords.
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Well, their bodies would perhaps have been disposed of. If someone did steal the coin other than those two, the real thieves would prefer for the bodies to never be found, I guess.
They're probably dead (Score:2)
After all, what better way to anonymise the money and to keep the authorities looking at the wrong people than to take the bitcoin and then kill the brothers to hide your tracks.
The biggest crypto scam (Score:5, Informative)
is BTC itself
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I've got other boats that are tied to the value of real things and have had much better returns than BTC
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The only time I ever traded any coin is I bought DOGE and made 6$ in a day.
Other large pools of bitcoins? (Score:2)
Tell me more about those large pools, that sounds interesting. If they were from an exchange or other legitimate business they could segregate the stolen bitcoin and prevent their further use easy.
Presumable these large pools are purely criminal then ... how large are we talking about? Billions?
Sorry not sorry for laughing at them. Braggarts. (Score:2)
Joe's Garage (Score:5, Insightful)
Not to excuse the crooks, but: suckers and their money are soon separated.
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This is the Central Scrutinizer.
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You don't have to do that with any other asset, I don't keep share certificates under my bed.
Lie down with dogs, get up with fleas (Score:1)
There may be good intentions among some of the people who invest in and trade in bitcoin. Maybe.
But it's obvious to any disinterested observer that this cryptocoin stuff has devolved mainly into a way for people to advance scams and fund illegal activities like ransoms and drug sales and extortion and on and on from there.
So, at this point I figure anyone who puts any money into cryptocurrency knows what they're getting into and I don't have any sympathy at all when they lose their money to a scam.
"I did a
There's a guy down the street selling magic beans (Score:1)
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Now that's just silly.
By the way, I was looking at our records. Did you realize that your car's extended warranty is about to end? We've been trying to reach you.
LOL.
Exit strategy (Score:2)
This is was an exit strategy, just not the one people expect. Quantum Devices will bring the whole crypto currency edifice crashing down within a few years.
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> Quantum Devices will bring the whole crypto currency edifice crashing down within a few years.
How are you going to reverse hashes with quantum devices?
What is more traceable? (Score:2)
Dead men walking (Score:2)
If the miscreants involved are still alive that kind of money will attract various individuals who will be looking for the two gentlemen to actively persuade them via car batteries, hammers and pliers, to give up the keys etc. I'd imagine their life spans are measured in months - if they are not dead already. The same unfortunately also applies to their families.
obJoke (Score:1)