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Man Robbed of 16 Bitcoin Sues Young Thieves’ Parents

105 points by parsecs 5y ago

echelon 5y ago
Case law around Bitcoin theft is going to be very interesting. I'm highly interested in what will happen if we can crack the crypto and move all the funds from a given wallet without any interaction or deception. It's just math, and there's no sovereign entity you're attacking or depleting. No corporate server. Seems like if you can get the numbers to match, the proceeds are yours. But we'll see. Edit: are downvoters afraid of this idea?
- kybernetikos 5y ago
  > Seems like if you can get the numbers to match, the proceeds are yours. Couldn't you say the same about guessing a password?
  - Max_aaa 5y ago
    In one instance you are trying to guess a password on a particular private system. In the other, you are running a hashing function on a public ledger/data.
    - deleted 5y ago
      [deleted]
    - deleted 5y ago
      [deleted]
  - echelon 5y ago
    That's unauthorized access to a computer system owned or maintained by some entity. You'd either have to leak the database to get the hashes, compromise some other system, or keep trying to talk to the server to probe for weaknesses. With crypto it's just math that lives out in the open. But let's say they draw a line at "making a transaction that knowingly isn't yours". What if you leak some highly valued keys and short Bitcoin?
    - swivelmaster 5y ago
      You've made the "it's just math" argument multiple times in this thread, but it's irrelevant. Bitcoin are securities that have value because people say they do. Saying that BTC is just math is like saying that credit default swaps or frozen orange juice futures are just pieces of paper. The market assigns value to things. What those things physically are is irrelevant; If there is a buyer and there is a seller, the thing is real and has value. There's no question that theft of BTC is theft, the fundamental technology behind it isn't relevant to whether or not it's theft because people treat it as a concrete security that can be bought and sold.
      - echelon 5y ago
        > The market assigns value to things. That's obvious. Does US case law protect it, though? And in what ways? > There's no question that theft of BTC is theft If you publish keys you discover, that's not theft. And that's my point. How does the system deal with that? There's no technical means to roll back or prove original ownership (especially if you find multiple values for the key). The legal framework doesn't have any precedent, and if doesn't seem to me like it would protect you. If I publish, "Hey everybody! I found Satoshi's keys! They're 0FFF...", I didn't do anything wrong.
      - postalrat 5y ago
        "theft of BTC is theft" Exactly was "owned" and taken to be considered theft? A secret?
  - postalrat 5y ago
    For crypto having a working key gives you equal ownership.
- quantumBerry 5y ago
  If "crypto" is cracked to the extent it is possible to move funds from someone's account without interaction or deception (or incredible stupidity, such as as choosing/allowing a weak key or seed phrase) -- then the value of that coin/technology will quickly go to zero. There will be nothing to steal.
  - X6S1x6Okd1st 5y ago
    I generally agree, but for some reason BSV & ETC's value has not gone to zero even though they are experiencing deep & persistent chain re-orgs
- jfim 5y ago
  Wouldn't that just be fraud? It doesn't seem that different from someone writing a fake check, other than the check is some unauthorized set of bits as opposed to an unauthorized physical slip of paper.
- dan-robertson 5y ago
  I think this case was pretty obviously theft and it’s like saying that if you can put in the credit card numbers correctly then you can spend the money. It is obviously theft to trick someone else into giving you their money or stealing their numbers. I’m more curious about cases where some smart contract gives away a load of money because of some bug. There are legal cases where a contract says something stupid and courts uphold the contract and there are legal cases where a contract says something stupid and the courts instead go for the thing the contract meant to say. A funny example is that lawyers don’t like to write an equation into a contract and sometimes someone will tell them the equation that everyone agrees on for calculating interest, and they will convert it to words in the contract and the conversion will be incorrect leading to e.g. applying interest of “inflation since start of contract” cumulatively each year (leading to superexponential growth).
  - deleted 5y ago
    [deleted]
salt-thrower 5y ago
The irony of crypto being lauded as an unregulated market outside of government control, and then crypto millionaires using government-backed courts to sue when they lose their assets due to bad opsec, is palpable. Everyone loves the wild west until they're the ones being victimized, then it turns out 3rd party authorities are useful after all.
- X6S1x6Okd1st 5y ago
  It's a large space, not everyone holds the same beliefs.
  - salt-thrower 5y ago
    Sure, but it is a very popular belief, and one that has been a prevailing "selling point" of crypto since its inception.
    - trompetenaccoun 5y ago
      The selling point is the immutable ledger. No sane person believes it will replace all institutions.
      - salt-thrower 5y ago
        I've been hearing crypto enthusiasts say that crypto will make institutions obsolete since crypto first started. I agree that such people are not sane, yet they are a very vocal portion of the crypto fanbase.
        meowface 5y ago
        There are a lot of very vocal minorities on the internet, across a wide range of groups.
- ews 5y ago
  I came looking for this boilerplate comment, which always appears on the top at HN. I am not disappointed. Can we move on and accept that not everyone who is using crypto is a dark hat crypto-libertarian hacker already?
nodesocket 5y ago
How did they track the destination address to Oliver Paul Read? How is that even possible? Was it because the address was a Bitfinex address which they subpoenaed?
- nhumrich 5y ago
  yes, exactly. It says this in the letter to the parents. "We know its him because we subpoenaed bitfinex"
- tinco 5y ago
  From the article it shows the kids had bad opsec, and their identities could be deduced from Github accounts that were linked to the theft which were subsequently subpoenaed. edit: And since they were asking on github on how to get the private key from the malware, they apparently succeeded in getting that private key and then probably sent the coins to bitfinex. That transaction would be visible on the chain of course, so it's an independent thread of evidence.
ffgh 5y ago
What's interesting to me is the letter sent to the parents house, it's similar to that of a scam email requesting for millions of bitcoin... or else. The irony. Side note: could have this happened if you ran a browser with JS turned off?
- dan-robertson 5y ago
  The exploit was that the victim downloaded some malware (that came bundled with software he intended to download) which ran in the background looking for a Bitcoin address in his clipboard and quickly replacing it with a different one. It wouldn’t be possible to do that in an ordinary JavaScript application (lots of restrictions on clipboard access) and the malware was not a website so turning js is irrelevant
- cheeze 5y ago
  Ah yes, the standard "js is evil and should never run" comment Read the article?
anonymousiam 5y ago
Pretty stupid of his mother to represent him, and then admit to the court that he did it. The statute of limitations argument is a loser.
- spicybright 5y ago
  Wow, they refused a lawyer? Lol
  - codetrotter 5y ago
    The defendants are in the UK, and the plaintiff in the US. The plaintiff filed their suit in Colorado according to the article. Even though the US has this rule that they will appoint you a lawyer, I don’t know if that applies when the defendant is a foreign national who is not even physically in the US. And I don’t know the UK legal system but if it’s anything like my country then they may need to hire the lawyer themselves. And it could be that they cannot afford this. I mean sure the kids stole a lot of Bitcoin but it’s not a good idea to use the stolen money until they know whether or not they get away with it. (And for the record I hope of course that they are forced to return the stolen Bitcoins.) Furthermore even though the mother is representing the son, it is possible that they have already sought advice from a lawyer on what to say. IANAL, TINLA.
    - pkaye 5y ago
      > Even though the US has this rule that they will appoint you a lawyer... I believe that is only for criminal trials. Isn't this a civil case?
      - codetrotter 5y ago
        > I believe that is only for criminal trials I looked it up and you are correct. There were some additional details about some circumstances where it could apply even then. But like I said, I’m not a lawyer :p
- oh_sigh 5y ago
trinovantes 5y ago
I'm curious how cross-border civil-case lawsuits work between individuals. Can the Reads just ignore the lawsuit? If so, will they get arrested next time they try to enter the US or do they get extradited upon conviction?
- joshuaheard 5y ago
  There are ways to serve defendants internationally in a civil case. Once served, you must win your case, get a judgment, then take your judgment into the country of residence of the defendants and get it entered there. You cannot be arrested for a civil judgment. It's all about money.
deleted 5y ago
[deleted]
optimalsolver 5y ago
And yet another rugged crypto individualist calls in Big Daddy Government to clean up the mess.
honkycat 5y ago
I got duped like this once. I clicked on a crypto-bank in the /r/bitcoin sidebar, and it ended up being a scam. Of course, this was when bitcoin was $500 and I was just trying to transf it off of a work computer. If I was dealing with tens of thousands, I would not have been so foolish to try and transfer the bitcoin without expert help. Who the hell installs a random app and then uses it to transfer millions of $$ in bitcoin?!? What a fool!
- rlpb 5y ago
  > If I was dealing with tens of thousands, I would not have been so foolish to try and transfer the bitcoin without expert help. How do you identify expert help that you can trust, if you're not qualified to assess expertise?
- sellyme 5y ago
  > Who the hell installs a random app and then uses it to transfer millions of $$ in bitcoin?!? It's not like there's a huge wealth of stable reputable ecosystems that could have been used as an alternative. Look at any crypto forums from just 5 years ago and just about every single website or tool mentioned has either been hacked or run off with users' money in the intervening period.
- happytoexplain 5y ago
  What is "random" software, and what is not? Most people have no context for making that distinction. Avoiding software, or identifying honest expert help, can also be infeasible for these people. Most technologically experienced people don't appreciate or respect this massive hindrance the majority live with.
- t8e56vd4ih 5y ago
  > was just trying to transf it off of a work computer. you what? you were trying to transfer btc from a (work) computer? well ....
rahimnathwani 5y ago
"Because plaintiff did not file his lawsuit until May 21, 2021, three years and five months after his injury, his claims should be dismissed." Can someone please explain how the statute of limitations works? From what this lawyer wrote, it sounds like the clock starts ticking when you find out you were injured even if you have no idea who did it. So, if it takes you years to track down the thief, then you're out of luck even if you file suit the day you discover his identity. Is this correct?
- ganoushoreilly 5y ago
  That's the way it reads, but my guess is it would fall under the discovery rule, maybe not but if not it seems crazy. https://statelaws.findlaw.com/colorado-law/colorado-civil-statute-of-limitations-laws.html https://statelaws.findlaw.com/colorado-law/colorado-civil-st...
  - rahimnathwani 5y ago
    I'm not sure if this applies in Colorado, but I just read on a law firm's web site[0] that, if you file a 'John Doe' lawsuit, you are filing within the statute of limitations, even if you don't amend the filing with the defendant's name until later. [0] https://www.shouselaw.com/ca/personal-injury/suing-john-doe-defendants/ https://www.shouselaw.com/ca/personal-injury/suing-john-doe-...
trompetenaccoun 5y ago
If this is all true the kid tried to frame another boy for the theft. The ethics of stealing aside, that's just pure evil, especially at such a young age. Imagine they'd not discovered him and it would have ruined the other guy's life having to go to prison for a crime they didn't commit.
philangist 5y ago
> Neither of the defendants’ families are disputing the basic claim that their kids stole from Mr. Schober. Rather, they’re claiming that time has run out on Schober’s legal ability to claim a cause of action against them. I was honestly shocked to read this. Can it be surprising the kids think it's okay to steal if this is their parent's response? Clearly two very smart guys but in the long run ethics matter a lot more than money or intelligence.
- KingMachiavelli 5y ago
  16 bitcoin is worth $784,000 which is probably enough to delegate morality to the legal system.
  - krebsonsecurity 5y ago
    Yep. And it was worth close to a million on the day he filed this lawsuit.
- malshe 5y ago
  My thoughts exactly!
- mikestew 5y ago
  Meh, gotta learn it somewhere. Some kid in the neighborhood broke into a bunch of mailboxes. Looked him up, looked up his dad. It came as no surprise that the kid's father is no longer allowed to make telephone sales in the state of Tennessee. I'll leave it to the reader's imagination as to why that might be.
- mikeryan 5y ago
  There’s no admission of guilt here. They’re just starting with this as an initial argument as the rest becomes moot if the motion succeeds.
  - TacticalCoder 5y ago
    That is not the point. There's the legal system. Then there's morality and how you raise kids. If the parents act like these, they shouldn't be surprised they're raising little filthy thieves. In other words: parents raising kids giving them values like respecting the private property of others (no matter if it's actual physical gold coins, a bicycle, Bitcoins or whatever really) probably wouldn't use such pathetic tactics to try to dismiss the case. But the real point is: parents raising kids with actual values probably wouldn't be raising scummy thieves in the first place.
abledon 5y ago
Is this the "Electrum-Atom" he was talking about? https://github.com/rootSig/electrum-atom https://github.com/rootSig/electrum-atom

105 points by parsecs 5y ago

Case law around Bitcoin theft is going to be very interesting. I'm highly interested in what will happen if we can crack the crypto and move all the funds from a given wallet without any interaction or deception. It's just math, and there's no sovereign entity you're attacking or depleting. No corporate server. Seems like if you can get the numbers to match, the proceeds are yours. But we'll see. Edit: are downvoters afraid of this idea?

kybernetikos 5y ago
> Seems like if you can get the numbers to match, the proceeds are yours. Couldn't you say the same about guessing a password?
- Max_aaa 5y ago
  In one instance you are trying to guess a password on a particular private system. In the other, you are running a hashing function on a public ledger/data.
  - deleted 5y ago
    [deleted]
  - deleted 5y ago
    [deleted]
- echelon 5y ago
  That's unauthorized access to a computer system owned or maintained by some entity. You'd either have to leak the database to get the hashes, compromise some other system, or keep trying to talk to the server to probe for weaknesses. With crypto it's just math that lives out in the open. But let's say they draw a line at "making a transaction that knowingly isn't yours". What if you leak some highly valued keys and short Bitcoin?
  - swivelmaster 5y ago
    You've made the "it's just math" argument multiple times in this thread, but it's irrelevant. Bitcoin are securities that have value because people say they do. Saying that BTC is just math is like saying that credit default swaps or frozen orange juice futures are just pieces of paper. The market assigns value to things. What those things physically are is irrelevant; If there is a buyer and there is a seller, the thing is real and has value. There's no question that theft of BTC is theft, the fundamental technology behind it isn't relevant to whether or not it's theft because people treat it as a concrete security that can be bought and sold.
    - echelon 5y ago
      > The market assigns value to things. That's obvious. Does US case law protect it, though? And in what ways? > There's no question that theft of BTC is theft If you publish keys you discover, that's not theft. And that's my point. How does the system deal with that? There's no technical means to roll back or prove original ownership (especially if you find multiple values for the key). The legal framework doesn't have any precedent, and if doesn't seem to me like it would protect you. If I publish, "Hey everybody! I found Satoshi's keys! They're 0FFF...", I didn't do anything wrong.
    - postalrat 5y ago
      "theft of BTC is theft" Exactly was "owned" and taken to be considered theft? A secret?
- postalrat 5y ago
  For crypto having a working key gives you equal ownership.
quantumBerry 5y ago
If "crypto" is cracked to the extent it is possible to move funds from someone's account without interaction or deception (or incredible stupidity, such as as choosing/allowing a weak key or seed phrase) -- then the value of that coin/technology will quickly go to zero. There will be nothing to steal.
- X6S1x6Okd1st 5y ago
  I generally agree, but for some reason BSV & ETC's value has not gone to zero even though they are experiencing deep & persistent chain re-orgs
jfim 5y ago
Wouldn't that just be fraud? It doesn't seem that different from someone writing a fake check, other than the check is some unauthorized set of bits as opposed to an unauthorized physical slip of paper.
dan-robertson 5y ago
I think this case was pretty obviously theft and it’s like saying that if you can put in the credit card numbers correctly then you can spend the money. It is obviously theft to trick someone else into giving you their money or stealing their numbers. I’m more curious about cases where some smart contract gives away a load of money because of some bug. There are legal cases where a contract says something stupid and courts uphold the contract and there are legal cases where a contract says something stupid and the courts instead go for the thing the contract meant to say. A funny example is that lawyers don’t like to write an equation into a contract and sometimes someone will tell them the equation that everyone agrees on for calculating interest, and they will convert it to words in the contract and the conversion will be incorrect leading to e.g. applying interest of “inflation since start of contract” cumulatively each year (leading to superexponential growth).
- deleted 5y ago
  [deleted]

salt-thrower 5y ago

The irony of crypto being lauded as an unregulated market outside of government control, and then crypto millionaires using government-backed courts to sue when they lose their assets due to bad opsec, is palpable. Everyone loves the wild west until they're the ones being victimized, then it turns out 3rd party authorities are useful after all.

X6S1x6Okd1st 5y ago
It's a large space, not everyone holds the same beliefs.
- salt-thrower 5y ago
  Sure, but it is a very popular belief, and one that has been a prevailing "selling point" of crypto since its inception.
  - trompetenaccoun 5y ago
    The selling point is the immutable ledger. No sane person believes it will replace all institutions.
    - salt-thrower 5y ago
      I've been hearing crypto enthusiasts say that crypto will make institutions obsolete since crypto first started. I agree that such people are not sane, yet they are a very vocal portion of the crypto fanbase.
      - meowface 5y ago
        There are a lot of very vocal minorities on the internet, across a wide range of groups.
ews 5y ago
I came looking for this boilerplate comment, which always appears on the top at HN. I am not disappointed. Can we move on and accept that not everyone who is using crypto is a dark hat crypto-libertarian hacker already?

nodesocket 5y ago

How did they track the destination address to Oliver Paul Read? How is that even possible? Was it because the address was a Bitfinex address which they subpoenaed?

nhumrich 5y ago
yes, exactly. It says this in the letter to the parents. "We know its him because we subpoenaed bitfinex"
tinco 5y ago
From the article it shows the kids had bad opsec, and their identities could be deduced from Github accounts that were linked to the theft which were subsequently subpoenaed. edit: And since they were asking on github on how to get the private key from the malware, they apparently succeeded in getting that private key and then probably sent the coins to bitfinex. That transaction would be visible on the chain of course, so it's an independent thread of evidence.

ffgh 5y ago

What's interesting to me is the letter sent to the parents house, it's similar to that of a scam email requesting for millions of bitcoin... or else. The irony. Side note: could have this happened if you ran a browser with JS turned off?

dan-robertson 5y ago
The exploit was that the victim downloaded some malware (that came bundled with software he intended to download) which ran in the background looking for a Bitcoin address in his clipboard and quickly replacing it with a different one. It wouldn’t be possible to do that in an ordinary JavaScript application (lots of restrictions on clipboard access) and the malware was not a website so turning js is irrelevant
cheeze 5y ago
Ah yes, the standard "js is evil and should never run" comment Read the article?

anonymousiam 5y ago

Pretty stupid of his mother to represent him, and then admit to the court that he did it. The statute of limitations argument is a loser.

spicybright 5y ago
Wow, they refused a lawyer? Lol
- codetrotter 5y ago
  The defendants are in the UK, and the plaintiff in the US. The plaintiff filed their suit in Colorado according to the article. Even though the US has this rule that they will appoint you a lawyer, I don’t know if that applies when the defendant is a foreign national who is not even physically in the US. And I don’t know the UK legal system but if it’s anything like my country then they may need to hire the lawyer themselves. And it could be that they cannot afford this. I mean sure the kids stole a lot of Bitcoin but it’s not a good idea to use the stolen money until they know whether or not they get away with it. (And for the record I hope of course that they are forced to return the stolen Bitcoins.) Furthermore even though the mother is representing the son, it is possible that they have already sought advice from a lawyer on what to say. IANAL, TINLA.
  - pkaye 5y ago
    > Even though the US has this rule that they will appoint you a lawyer... I believe that is only for criminal trials. Isn't this a civil case?
    - codetrotter 5y ago
      > I believe that is only for criminal trials I looked it up and you are correct. There were some additional details about some circumstances where it could apply even then. But like I said, I’m not a lawyer :p
oh_sigh 5y ago

trinovantes 5y ago

I'm curious how cross-border civil-case lawsuits work between individuals. Can the Reads just ignore the lawsuit? If so, will they get arrested next time they try to enter the US or do they get extradited upon conviction?

joshuaheard 5y ago
There are ways to serve defendants internationally in a civil case. Once served, you must win your case, get a judgment, then take your judgment into the country of residence of the defendants and get it entered there. You cannot be arrested for a civil judgment. It's all about money.

deleted 5y ago

[deleted]

optimalsolver 5y ago

And yet another rugged crypto individualist calls in Big Daddy Government to clean up the mess.

honkycat 5y ago

I got duped like this once. I clicked on a crypto-bank in the /r/bitcoin sidebar, and it ended up being a scam. Of course, this was when bitcoin was $500 and I was just trying to transf it off of a work computer. If I was dealing with tens of thousands, I would not have been so foolish to try and transfer the bitcoin without expert help. Who the hell installs a random app and then uses it to transfer millions of $$ in bitcoin?!? What a fool!

rlpb 5y ago
> If I was dealing with tens of thousands, I would not have been so foolish to try and transfer the bitcoin without expert help. How do you identify expert help that you can trust, if you're not qualified to assess expertise?
sellyme 5y ago
> Who the hell installs a random app and then uses it to transfer millions of $$ in bitcoin?!? It's not like there's a huge wealth of stable reputable ecosystems that could have been used as an alternative. Look at any crypto forums from just 5 years ago and just about every single website or tool mentioned has either been hacked or run off with users' money in the intervening period.
happytoexplain 5y ago
What is "random" software, and what is not? Most people have no context for making that distinction. Avoiding software, or identifying honest expert help, can also be infeasible for these people. Most technologically experienced people don't appreciate or respect this massive hindrance the majority live with.
t8e56vd4ih 5y ago
> was just trying to transf it off of a work computer. you what? you were trying to transfer btc from a (work) computer? well ....

rahimnathwani 5y ago

"Because plaintiff did not file his lawsuit until May 21, 2021, three years and five months after his injury, his claims should be dismissed." Can someone please explain how the statute of limitations works? From what this lawyer wrote, it sounds like the clock starts ticking when you find out you were injured even if you have no idea who did it. So, if it takes you years to track down the thief, then you're out of luck even if you file suit the day you discover his identity. Is this correct?

ganoushoreilly 5y ago
That's the way it reads, but my guess is it would fall under the discovery rule, maybe not but if not it seems crazy. https://statelaws.findlaw.com/colorado-law/colorado-civil-statute-of-limitations-laws.html https://statelaws.findlaw.com/colorado-law/colorado-civil-st...
- rahimnathwani 5y ago
  I'm not sure if this applies in Colorado, but I just read on a law firm's web site[0] that, if you file a 'John Doe' lawsuit, you are filing within the statute of limitations, even if you don't amend the filing with the defendant's name until later. [0] https://www.shouselaw.com/ca/personal-injury/suing-john-doe-defendants/ https://www.shouselaw.com/ca/personal-injury/suing-john-doe-...

trompetenaccoun 5y ago

If this is all true the kid tried to frame another boy for the theft. The ethics of stealing aside, that's just pure evil, especially at such a young age. Imagine they'd not discovered him and it would have ruined the other guy's life having to go to prison for a crime they didn't commit.

philangist 5y ago

> Neither of the defendants’ families are disputing the basic claim that their kids stole from Mr. Schober. Rather, they’re claiming that time has run out on Schober’s legal ability to claim a cause of action against them. I was honestly shocked to read this. Can it be surprising the kids think it's okay to steal if this is their parent's response? Clearly two very smart guys but in the long run ethics matter a lot more than money or intelligence.

KingMachiavelli 5y ago
16 bitcoin is worth $784,000 which is probably enough to delegate morality to the legal system.
- krebsonsecurity 5y ago
  Yep. And it was worth close to a million on the day he filed this lawsuit.
malshe 5y ago
My thoughts exactly!
mikestew 5y ago
Meh, gotta learn it somewhere. Some kid in the neighborhood broke into a bunch of mailboxes. Looked him up, looked up his dad. It came as no surprise that the kid's father is no longer allowed to make telephone sales in the state of Tennessee. I'll leave it to the reader's imagination as to why that might be.
mikeryan 5y ago
There’s no admission of guilt here. They’re just starting with this as an initial argument as the rest becomes moot if the motion succeeds.
- TacticalCoder 5y ago
  That is not the point. There's the legal system. Then there's morality and how you raise kids. If the parents act like these, they shouldn't be surprised they're raising little filthy thieves. In other words: parents raising kids giving them values like respecting the private property of others (no matter if it's actual physical gold coins, a bicycle, Bitcoins or whatever really) probably wouldn't use such pathetic tactics to try to dismiss the case. But the real point is: parents raising kids with actual values probably wouldn't be raising scummy thieves in the first place.

abledon 5y ago

Is this the "Electrum-Atom" he was talking about? https://github.com/rootSig/electrum-atom https://github.com/rootSig/electrum-atom