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This looks and smells like an inside job. Similar to: https://cointelegraph.com/news/signs-point-to-inside-job-in-upbit-crypto-exchange-hack-says-commentator h

by gadnuk 5y ago

This looks and smells like an inside job. Similar to: https://cointelegraph.com/news/signs-point-to-inside-job-in-upbit-crypto-exchange-hack-says-commentator https://cointelegraph.com/news/signs-point-to-inside-job-in-... or: https://dailyhodl.com/2019/04/01/inside-job-19-million-bithumb-hack-exposes-major-problem-with-cryptocurrency-exchanges/ https://dailyhodl.com/2019/04/01/inside-job-19-million-bithu... The timing seems suspicious too. When most of crypto land was crashing. My theory is that this exchange simply didn't have enough liquidity when the price crashed and they simply siphoned off the hot wallet. Lots of people wanted to sell at once. Bitmart did not have these funds. A hack at the same time is just too convenient. Watching the Ether address get drained in real time yesterday was surreal to see, like out of a movie: https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acfc59f89f7091 https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acf... This whole space is full of scams and exchanges that know everything about you in terms of what limits you've set to buy/sell, the order book, liquidity, etc. And worse, they can bet against you. Alameda admitted yesterday that they ended up profiting quite a bit being short BTC Futures (long spot) because the spread collapsed (Source: https://twitter.com/AlamedaTrabucco/status/1467219750489141250?s=20 https://twitter.com/AlamedaTrabucco/status/14672197504891412...) Only tight regulations can save investors because these "hacks" are way too common. And don't even get me started on Tether ( who conveniently printed another billion after the liquidations were done: https://twitter.com/whale_alert/status/1467155858228494353 https://twitter.com/whale_alert/status/1467155858228494353 ) Edit: rofl, they just printed another $1 billion, on a weekend! https://twitter.com/whale_alert/status/1467504581571751940 https://twitter.com/whale_alert/status/1467504581571751940 It's funny how brazen they've become. Not to mention Bitfinex and Tether CTO implying the dip was done after they printed: https://twitter.com/paoloardoino/status/1467053381072138240 https://twitter.com/paoloardoino/status/1467053381072138240 Everything in this space seems so shady. But the regulators don't seems to give a damn and keep kicking the can for eternity. It's the wild wild west out there. Moral of the story: Not your keys, not your coins. Do not keep your coins on exchanges.

kwertyoowiyop 5y ago
The cyber equivalent of arson at a money-losing business, except no third-party is needed.
cheese_van 5y ago
>Only tight regulations can save investors because these "hacks" are way too common. and don't even get me started on Tether. Perhaps regulators have been tardy because they find it difficult to determine what of value was stolen. It may not be clear to them that crypto has value worth protecting by regulation. That's not to say there is no value in crypto, or that crypto transactions do not deserve being regulated to protect the public. It's simply that regulators may not understand, or believe, that there is value worth regulating. I confess to the same lack of understanding.
- unclebucknasty 5y ago
  >It may not be clear to them that crypto has value worth protecting by regulation. That ship has sailed. It's really not a question of what anyone thinks of intrinsic value when the two top coins alone have a market cap of over $1T and easily do north of $60B in transactions over a 24-hour period. The number of people and amounts involved are the consideration.
- jl6 5y ago
  The taxman is happy to collect their percentage on crypto capital gains so I’m not sure the value too hard to spot. It doesn’t matter if crypto isn’t really valuable in some cosmic sense.
legohead 5y ago
Why does the "from"[1] say "Bitmart Hacker 2"? [1] https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acfc59f89f7091 https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acf...
- gadnuk 5y ago
  Etherscan puts that kind of label on the address, not the attacker themselves. It's standard protocol in such hacks.
Animats 5y ago
From the site: 'all withdrawals are suspended until "further notice."' That sounds like an inside job. They claim to be operating from the Cayman Islands and are not offering services to US persons, since they are not registered with the US SEC. However, it's actually run by someone from New Jersey.
PragmaticPulp 5y ago
> And don't even get me started on Tether ( who conveniently printed another billion after the liquidations were done: https://twitter.com/whale_alert/status/1467155858228494353 https://twitter.com/whale_alert/status/1467155858228494353 ) Tether is one of the most maddening scams out there. Who really believes that Tether had a cool billion dollars conveniently transferred into their banks so they could mint a huge chunk of synthetic dollars to inject into the cryptocurrency world? That's a suspiciously round number for such a large transaction. Yet people who are heavily invested in crypto will find any excuse to ignore the absurdity of this whole operation, mostly because admitting the Tether problem would be admitting that the value of cryptocurrency everywhere is artificially inflated.
- SavantIdiot 5y ago
  Last I heard tether only had about 2% of total tethers backed by dollars. Yikes.
hidenotslide 5y ago
I don't think you understood what Sam was saying, being short BTC futures is NOT the same as having a net short exposure to bitcoin prices. And what does Tether have to do with BitMart, an exchange I had never even heard of before this "hack"?
- gadnuk 5y ago
  They weren't net short by design since they have to stay delta neutral. They were long spot and short futures. However when the liquidations started happening, the futures to spot premium went outta whack. https://twitter.com/AlamedaTrabucco/status/1467219743690141698?s=20 https://twitter.com/AlamedaTrabucco/status/14672197436901416... So instead of locking in some spread they target, they ended up benefitting with a much larger profit. And BitMart has no option to trade in USD. They trade exclusively in USDT. Tether might not have a hand in the hack, but they definitely have a hand in providing liquidity to exchanges which they print out of thin air with no actual 1-to-1 USD backing. The Tether part was to highlight how this space is rife with scams, both on the shadow banking side and on the exchange side of things.
  - hidenotslide 5y ago
    But how is being delta neutral a scam? If they weren't taking the other side of the long futures trade, someone else would at an even worse price. And if they weren't buying it back lower, someone else would at a worse price. The idea that Tether just prints out of thin air is a conspiracy theory, I've seen large traders confirm they can do create/redeems and there was some information released about their holdings of commercial paper, settlement with NYAG, etc. And they have frozen stolen funds in the past, in the case of the Poly network hack. USDT routinely trades at a premium to USD, the market does not seem worried. Of course Binance and Tether and a lot of other unregulated crypto companies are shady, but it's more interesting to focus on the particular shady company in the original post.
    - gadnuk 5y ago
      Tether has regularly been sued and settled, never won. CFTC: https://www.cftc.gov/PressRoom/PressReleases/8450-21 https://www.cftc.gov/PressRoom/PressReleases/8450-21 NYAG: https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle... DOJ: https://www.bloomberg.com/news/articles/2021-07-26/tether-executives-said-to-face-criminal-probe-into-bank-fraud https://www.bloomberg.com/news/articles/2021-07-26/tether-ex... They have been evading an audit for almost 7 years now. They are required to provide an attestation every 3 months and yet they delayed the last one. Their current attestation raises more questions than answers: https://twitter.com/dee_bosa/status/1466826912781590529 https://twitter.com/dee_bosa/status/1466826912781590529 Their attestations have never been independently verified. Their commercial paper holdings are all murky and they have never provided an actual breakdown. Who knows if they are holding large quantities of commercial paper tied to Chinese real estate? I mean, for a legit org, they tend to get sued quite a lot (and never win). An audit for a stablecoin shouldn't really be hard to do. And no, it's not really a conspiracy theory when there is so much evidence against Tether and Bitfinex. The burden of proof is on them. They can have all the "conspiracy theories" go away with an audit. 7 years. Still waiting. Accusations against Theranos were labeled as conspiracy theories up until 2015. They were until they weren't. Regards Alameda and being delta neutral, I edited my comment. I never claimed it was a scam. It's just that firms can profit off crashes which may embolden others to take similar positions. The whole space is highly manipulated by big players, its as simple as that.

by gadnuk 5y ago

kwertyoowiyop 5y ago

The cyber equivalent of arson at a money-losing business, except no third-party is needed.

cheese_van 5y ago

>Only tight regulations can save investors because these "hacks" are way too common. and don't even get me started on Tether. Perhaps regulators have been tardy because they find it difficult to determine what of value was stolen. It may not be clear to them that crypto has value worth protecting by regulation. That's not to say there is no value in crypto, or that crypto transactions do not deserve being regulated to protect the public. It's simply that regulators may not understand, or believe, that there is value worth regulating. I confess to the same lack of understanding.

unclebucknasty 5y ago
>It may not be clear to them that crypto has value worth protecting by regulation. That ship has sailed. It's really not a question of what anyone thinks of intrinsic value when the two top coins alone have a market cap of over $1T and easily do north of $60B in transactions over a 24-hour period. The number of people and amounts involved are the consideration.
jl6 5y ago
The taxman is happy to collect their percentage on crypto capital gains so I’m not sure the value too hard to spot. It doesn’t matter if crypto isn’t really valuable in some cosmic sense.

legohead 5y ago

Why does the "from"[1] say "Bitmart Hacker 2"? [1] https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acfc59f89f7091 https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acf...

gadnuk 5y ago
Etherscan puts that kind of label on the address, not the attacker themselves. It's standard protocol in such hacks.

Animats 5y ago

From the site: 'all withdrawals are suspended until "further notice."' That sounds like an inside job. They claim to be operating from the Cayman Islands and are not offering services to US persons, since they are not registered with the US SEC. However, it's actually run by someone from New Jersey.

PragmaticPulp 5y ago

> And don't even get me started on Tether ( who conveniently printed another billion after the liquidations were done: https://twitter.com/whale_alert/status/1467155858228494353 https://twitter.com/whale_alert/status/1467155858228494353 ) Tether is one of the most maddening scams out there. Who really believes that Tether had a cool billion dollars conveniently transferred into their banks so they could mint a huge chunk of synthetic dollars to inject into the cryptocurrency world? That's a suspiciously round number for such a large transaction. Yet people who are heavily invested in crypto will find any excuse to ignore the absurdity of this whole operation, mostly because admitting the Tether problem would be admitting that the value of cryptocurrency everywhere is artificially inflated.

SavantIdiot 5y ago
Last I heard tether only had about 2% of total tethers backed by dollars. Yikes.

hidenotslide 5y ago

I don't think you understood what Sam was saying, being short BTC futures is NOT the same as having a net short exposure to bitcoin prices. And what does Tether have to do with BitMart, an exchange I had never even heard of before this "hack"?

gadnuk 5y ago
They weren't net short by design since they have to stay delta neutral. They were long spot and short futures. However when the liquidations started happening, the futures to spot premium went outta whack. https://twitter.com/AlamedaTrabucco/status/1467219743690141698?s=20 https://twitter.com/AlamedaTrabucco/status/14672197436901416... So instead of locking in some spread they target, they ended up benefitting with a much larger profit. And BitMart has no option to trade in USD. They trade exclusively in USDT. Tether might not have a hand in the hack, but they definitely have a hand in providing liquidity to exchanges which they print out of thin air with no actual 1-to-1 USD backing. The Tether part was to highlight how this space is rife with scams, both on the shadow banking side and on the exchange side of things.
- hidenotslide 5y ago
  But how is being delta neutral a scam? If they weren't taking the other side of the long futures trade, someone else would at an even worse price. And if they weren't buying it back lower, someone else would at a worse price. The idea that Tether just prints out of thin air is a conspiracy theory, I've seen large traders confirm they can do create/redeems and there was some information released about their holdings of commercial paper, settlement with NYAG, etc. And they have frozen stolen funds in the past, in the case of the Poly network hack. USDT routinely trades at a premium to USD, the market does not seem worried. Of course Binance and Tether and a lot of other unregulated crypto companies are shady, but it's more interesting to focus on the particular shady company in the original post.
  - gadnuk 5y ago
    Tether has regularly been sued and settled, never won. CFTC: https://www.cftc.gov/PressRoom/PressReleases/8450-21 https://www.cftc.gov/PressRoom/PressReleases/8450-21 NYAG: https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle... DOJ: https://www.bloomberg.com/news/articles/2021-07-26/tether-executives-said-to-face-criminal-probe-into-bank-fraud https://www.bloomberg.com/news/articles/2021-07-26/tether-ex... They have been evading an audit for almost 7 years now. They are required to provide an attestation every 3 months and yet they delayed the last one. Their current attestation raises more questions than answers: https://twitter.com/dee_bosa/status/1466826912781590529 https://twitter.com/dee_bosa/status/1466826912781590529 Their attestations have never been independently verified. Their commercial paper holdings are all murky and they have never provided an actual breakdown. Who knows if they are holding large quantities of commercial paper tied to Chinese real estate? I mean, for a legit org, they tend to get sued quite a lot (and never win). An audit for a stablecoin shouldn't really be hard to do. And no, it's not really a conspiracy theory when there is so much evidence against Tether and Bitfinex. The burden of proof is on them. They can have all the "conspiracy theories" go away with an audit. 7 years. Still waiting. Accusations against Theranos were labeled as conspiracy theories up until 2015. They were until they weren't. Regards Alameda and being delta neutral, I edited my comment. I never claimed it was a scam. It's just that firms can profit off crashes which may embolden others to take similar positions. The whole space is highly manipulated by big players, its as simple as that.