Crypto.com: Fortune Favors the Hacker—$16M ‘Stolen’
DeFi exchange Crypto.com got hacked yesterday, sources say. Users reported imaginary money missing from their accounts—as researchers watched it being laundered.
But all is well! So says the Singapore-cum-China-cum-Malta-based company (and with an ownership structure like that, you know you can trust them). As CEO Kris Marszalek opaquely notes, “No customer funds were lost.”
Which presumably means $16.3M of VCs’ capital was lost. In today’s SB Blogwatch, we dance on the head of pin.
Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Hhhh-herbs.
DeFi: A Planet-Burning Ponzi Scheme
What’s the craic, you ask? Andrew Asmakov answers—“Crypto.com Suffers Hack for At Least $15M”:
“Definitely worse”
The platform has yet to confirm that it has indeed been attacked [but] Crypto.com announced it was pausing withdrawals after “a small number of users experienced unauthorized activity in their accounts.” … A household name in Asian markets, the Singapore-based exchange recently spent $700 million to buy the naming rights to the Staples Center—the Los Angeles home venue of the NBA’s Lakers and Clippers.
…
Events took a turn for the worse when security research company Peckshield [said] Crypto.com has lost at least 4,600 ETH (around $15 million in current prices) [and] that the true scale of the damage is “definitely worse.” … Peckshield added that half of the stolen funds were sent to Tornado Cash, the Ethereum-centric mixing service.
…
Remarkably, a few hours later, Crypto.com CEO Kris Marszalek said that no customer funds were lost.
A small number of users? Such as? Emily Nicolle notes one of them—“Crypto.com Suspends Withdrawals”:
“$16.3 million”
Several users had reported on social media that their cryptocurrencies, at times equating to tens of thousands of dollars, had disappeared from their Crypto.com accounts in recent days. … Technical issues on crypto trading platforms have become commonplace as the hype surrounding digital assets grows.
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Crypto influencer and podcast host Ben Baller said in a tweet on Monday that around 4.28 Ether, which equates to roughly $14,000, had been “stolen out of nowhere” [despite] two-factor authentication security measures. … Baller later alleged … a wallet belonging to Crypto.com had lost approximately 5,000 Ether, which equates to roughly $16.3 million.
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A spokesperson from Crypto.com didn’t respond to a request for comment.
And Andy Greenberg adds color and context—“North Korean Hackers Stole Nearly $400 Million in Crypto Last Year”:
“Lazarus”
The past year saw a breathtaking rise in the value of cryptocurrencies. … So perhaps it’s no surprise that the relentless North Korean hackers … had a very good year as well.
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The nine-figure sum represents a nearly $100 million increase over the previous year’s thefts by North Korean hacker groups … not including the uncounted hundreds of millions more the country has stolen from the traditional financial system. [It] contributes significantly to the coffers of Kim Jong-un’s totalitarian regime as it seeks to fund itself—and its weapons programs.
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Chainalysis says the thefts were all carried out by Lazarus, a loose grouping of hackers all widely believed to be working in the service of … a highly militarized rogue nation that has spent years under severe sanctions. … But other hacker-tracking firms have pointed out that Lazarus comprises many distinct groups.
But what really happened at Crypto.com? u/Ecsta alleges an allegation:
“Something serious”
All the people saying they got drained had 2FA enabled. Even if you assume they had their credentials compromised, the 2FA should have protected them, which it didn’t.
…
They didn’t reset 2FA for fun, so obviously something serious happened. … I hope they publish details on what exactly happened.
Creator of a joke that got out of hand, Billy Markus—@BillyM2k—is left scratching his head:
“Never a dull day”
I see odd activity on one of the Ethereum hot wallets. … Internal system transfers and funds are safe? Inside job gone awry like office space? Hackers taking funds from an exchange hot wallet?
…
Never a dull day in the world of crypto.
Cryptocurrency: How do we hate thee? Let DovePig count the ways:
“Cheap dirty coal”
North Korea nukes, ex-KGB mafia oligarchs in Transnistria, war in Donbas, all helped by crypto. … And all that’s probably just the tip of the iceberg.
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The breakaway region—and Russia’s convenient paw inside Europe—Transnistria (basically a mafia state run by a single company) is heavily dependent on crypto mining. Most of it … subsidised by nearly free Russian gas.
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[The] largest crypto mining country is Kazakhstan, accounting for nearly 20% … (because it has cheap dirty coal). … Crypto mining in the breakaway region of Donbas (cheap dirty coal) fuels the war there.
So it’ll incinerate the planet, but is DeFi also a Ponzi scheme? This Anonymous Coward thinks so:
“They’ll make out like bandits”
The crypto boys [call] it “DeFi” for “Decentralized Finance”, but its dirty little secret is that it’s really “Deregulated Finance.” … Their plan is to … start it off with a low price, then gradually increase it, by virtue of them just pulling numbers out of thin air.
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So now those that got in at the ground floor have gained all this “value” out of thin air, and once they’re ready, they’ll pull out all pretty much at once. That’ll create a sell-off panic … so they’ll make out like bandits, leaving everyone else to “hodl” the bag.
Got it. So what’s the true value? Not MMuch, says MMarsh: [You’re fired—Ed.]
“Not creating any new value”
Take the sum of all real money that’s been put into it, minus the sum of all real money that’s come out of it (including that which has simply been burned / wasted on energy to keep the scheme running). That figure, while not negligible, is undoubtedly small.
…
Remember, no actual new value is being created here. Value is being destroyed—in the form of wasted energy. The apparent huge value … comes from a small helping of crime and a small helping of rapid speculation being multiplied by a large quantity of idle “assets” just sitting around doing nothing. It’s changing the form in which value is stored and traded, but it’s not creating any new value in the way that regular economic activities do.
Meanwhile, u/yolotrumpbucks offers this neat precis:
So you’re saying that, when Matt Damon said fortune favors the bold, he meant that those that were bold enough to hack the system would make a fortune?
And Finally:
It’s all the fault of the French (obvs.)
You have been reading SB Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites … so you don’t have to. Hate mail may be directed to @RiCHi or [email protected]. Ask your doctor before reading. Your mileage may vary. E&OE. 30.
Image sauce: Nicolas Genin (cc:by-sa)
