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$320M is the kind of money where it's sufficient motivation for organized crime to simply kidnap and torture major crypto company officers/techies or individual

$320M is the kind of money where it's sufficient motivation for organized crime to simply kidnap and torture major crypto company officers/techies or individual crypto holders to force them to do whatever needs to be done. The reason why it's not done as much for ordinary businesses is that you can't just force someone to surrender $320M worth of stocks, real estate or wire transfers and actually keep that, it's reversible and traceable so most of it will be reversed and the rest traced. At best you can expect briefcases of cash ransom which is physically limited to much smaller amounts (e.g. it's simply impossible for a person to carry $320M in cash or fit it in a random car) and still needs laundering, and as the payoff is less lucrative then it's not worth the risk compared to other activities like trafficking drugs. Crypto, on the other hand, has this possibility to just force a large transaction and actually get away with it - so I'm just wondering why we aren't seeing cases of violently forced crypto transfers; perhaps they're just kept under wraps.

danielvf 5y ago
I've wondered this too. Three reasons: - It's currently easy enough to hack the same money. Way less effort. - Doing something physical puts the crime into areas where law enforcement is used to working, used to catching people, and leaves physical evidence in the world. At least in the developed world, kidnapping rich people goes to the head of the line for police resources. - Most large projects use multisigs. This means you may need to kidnap a half dozen people in multiple counties. Doable, but the odds of none of these failing and exposing the whole operation goes way up.
- paulpauper 5y ago
  not a single defi hacker has ever been caught or identified. pretty amazing when you consider the amount of money involved.
  - danielvf 5y ago
    As far as I know, not one has been caught by law enforcement. But several attackers have been tracked down by blockchain sleuths, or by the hacked projects themselves. In the usual case, when messaged with personal details about themselves, the attacker gives back 90%, and everyone calls it a day. Except for this guy. https://www.coindesk.com/policy/2021/12/22/teenage-suspect-in-16m-defi-hack-wanted-for-arrest-in-canada/ https://www.coindesk.com/policy/2021/12/22/teenage-suspect-i... Who might be first DeFi hacker to go to trial.
  - pcthrowaway 5y ago
    Look at the Indexed Finance hack, the hacker has been identified, and is fighting it in court (or claiming he will anyway), under the argument "code is law" Definitely an interesting one to watch
  - ulrikrasmussen 5y ago
    Are any of these hacks actually illegal? Genuine question, as I have not been able to find references to DeFi hackers that have been chased by law enforcement. IANAL, but if they are illegal, then it suggests that smart contracts are just to be viewed as automatations of some underlying contract which is subject to legal interpretation. But if such a legal contract does not exist prior to the deployment of the smart contract, then how will one determine which uses of the smart contract are legal, and which that are not? Even the hacks are just making the smart contracts do things that they were programmed to, although PROBABLY unintended.
    - freemint 5y ago
      If the person who was "robbed" involves the law, the executive might compel the "robber" to return the "money". This would be extremely bad looks for the "robbed" in the Crypto Community and unless the identity of thief is known it is impossible.
- corpMaverick 5y ago
  That is exactly what the parent comment is saying. $320M makes it worthwhile to do all that for organized crime.
- shihab 5y ago
  > Though I think this hacker has a greater than average risk of being caught Why?
- Nitrolo 5y ago
  Another factor might be that actually kidnapping and torturing someone is a very intense thing to do. I don't think a lot of people in the crypto space would have the stomach to do this (and that's a good thing!).
PretzelPirate 5y ago
Crypto also needs laundering. If someone forces me to hand over $50MM in Eth, I’ll file a police report with the addresses and they’ll get exchanges to block any funds coming from it. The thief may try to anonymize it with something like Tornado Cash, but that would take a very long time due to the largest pool being 100 ETH. The alternative is demanding payment in a privacy coin, but it will be difficult for any potential victim to get as much as you need quickly enough. Even with a privacy coin the attacker still has to be in close enough physical proximity to the victim or hostage to threaten them which leaves behind physical evidence. Overall, I’m not sure you gain much by demanding payment in crypto over cash.
- corpMaverick 5y ago
  > I’ll file a police report with the addresses You are assuming you are still alive.
- vmception 5y ago
  You can script tornado.cash deposits This amount would be up to half of the tornado cash anonymity pool, but can be withdrawn over time they can always withdraw a bunch of tornado cash notes to virgin addresses and pump a random cryptocurrency they already own and bought with their separate clean money if $SHIBDOGE rises 30,000% because virgin tornado cash funded whales are buying it, the prior owners are just going to be seen as lucky traders indistinguishable from the rest, all with clean money. one of those owners would ideally already own a lot of the chosen token and be the bridge exploiter. they will be seen as having much more clean money after selling their pumped crypto.
- jbkiv 5y ago
  In a previous life I was involved in K&R (kidnap & ransom) insurance. You just pay the ransom and never recover your money, so you price the insurance contracts accordingly. The police: "we don't prosecute those crimes" , "this is not our juridiction", "why don't you try the FBI?" I used to work in the Presidio of San Francisco. An ex military base. The only canons left are from the 1800's. I needed to file a police report (car theft), called the Police in San Francisco. OK, what's your address? Sorry, we don't handle those cases, call the Federal Police. Then later we had to file a lawsuit, so based on previous experience we filed in Federal Court. They told us, sorry even though you are on Federal land, you must file in a California court. Go figure. Just to say that nobody can help our dear crypto bros. BTW did you declare the existence and the amount of your crypto holdings last year? Oops, now you'll regret that police report you filed (goes into waste basket) and you have to deal with the IRS. The crypto world is better than the proverbial kid in the candy store.
paulpauper 5y ago
No one has been arrested either for defi hacks. perfect crime.
erehweb 5y ago
Here's one example - https://www.newsweek.com/bitcoin-millionaire-zaryn-dentzel-beaten-fortune-stolen-masked-robbery-cryptocurrency-1645550 https://www.newsweek.com/bitcoin-millionaire-zaryn-dentzel-b... and another - https://www.coindesk.com/markets/2018/01/29/uk-crypto-trader-forced-to-hand-over-bitcoin-at-gunpoint/ https://www.coindesk.com/markets/2018/01/29/uk-crypto-trader...
manquer 5y ago
No different for crypto. What I can I do with 100's of millions of dollars worth of tainted ETH ? The only thing you can really buy with coins are NFTs, if I want to buy a house or car or plane or whatever with the loot, I still have to convert that ETH to cash, major exchanges will blacklist these tokens, washing services/ coins cannot easily handle this volume, extracting value out of this size is just as complicated as regular crime.
- SXX 5y ago
  > What I can I do with 100's of millions of dollars worth of tainted ETH ? For instance you can spent few millions and get literally every re-used address tainted. Just sent $1 worth of ETH to top 1,000,000 single address holding meaningful amount of ETH, or expensive NFTs, etc. Then every legit exchange will have huge issue with maintaining blacklists. Oh and you can also sent 1 million to random people and 1 million to your own addresses. Or just sell some of your crypto on P2P exchange at 2-3x rate with collateral. There will be literally thousands of people who gonna be happy to accept your tainted ether if you pay them good enough. PS: So I literally see tons of opportunities how to do this kind of mixing. Yeah you'll lose huge percent of money, but even half of 300 millions is a lot of money.
- mhitza 5y ago
  > What I can I do with 100's of millions of dollars worth of tainted ETH ? You wash them through different coin swap contracts. Even losing $10 million worth, in gas/processing fees, is just 3.125% at the current estimated value.

danielvf 5y ago

I've wondered this too. Three reasons: - It's currently easy enough to hack the same money. Way less effort. - Doing something physical puts the crime into areas where law enforcement is used to working, used to catching people, and leaves physical evidence in the world. At least in the developed world, kidnapping rich people goes to the head of the line for police resources. - Most large projects use multisigs. This means you may need to kidnap a half dozen people in multiple counties. Doable, but the odds of none of these failing and exposing the whole operation goes way up.

paulpauper 5y ago
not a single defi hacker has ever been caught or identified. pretty amazing when you consider the amount of money involved.
- danielvf 5y ago
  As far as I know, not one has been caught by law enforcement. But several attackers have been tracked down by blockchain sleuths, or by the hacked projects themselves. In the usual case, when messaged with personal details about themselves, the attacker gives back 90%, and everyone calls it a day. Except for this guy. https://www.coindesk.com/policy/2021/12/22/teenage-suspect-in-16m-defi-hack-wanted-for-arrest-in-canada/ https://www.coindesk.com/policy/2021/12/22/teenage-suspect-i... Who might be first DeFi hacker to go to trial.
- pcthrowaway 5y ago
  Look at the Indexed Finance hack, the hacker has been identified, and is fighting it in court (or claiming he will anyway), under the argument "code is law" Definitely an interesting one to watch
- ulrikrasmussen 5y ago
  Are any of these hacks actually illegal? Genuine question, as I have not been able to find references to DeFi hackers that have been chased by law enforcement. IANAL, but if they are illegal, then it suggests that smart contracts are just to be viewed as automatations of some underlying contract which is subject to legal interpretation. But if such a legal contract does not exist prior to the deployment of the smart contract, then how will one determine which uses of the smart contract are legal, and which that are not? Even the hacks are just making the smart contracts do things that they were programmed to, although PROBABLY unintended.
  - freemint 5y ago
    If the person who was "robbed" involves the law, the executive might compel the "robber" to return the "money". This would be extremely bad looks for the "robbed" in the Crypto Community and unless the identity of thief is known it is impossible.
corpMaverick 5y ago
That is exactly what the parent comment is saying. $320M makes it worthwhile to do all that for organized crime.
shihab 5y ago
> Though I think this hacker has a greater than average risk of being caught Why?
Nitrolo 5y ago
Another factor might be that actually kidnapping and torturing someone is a very intense thing to do. I don't think a lot of people in the crypto space would have the stomach to do this (and that's a good thing!).

PretzelPirate 5y ago

Crypto also needs laundering. If someone forces me to hand over $50MM in Eth, I’ll file a police report with the addresses and they’ll get exchanges to block any funds coming from it. The thief may try to anonymize it with something like Tornado Cash, but that would take a very long time due to the largest pool being 100 ETH. The alternative is demanding payment in a privacy coin, but it will be difficult for any potential victim to get as much as you need quickly enough. Even with a privacy coin the attacker still has to be in close enough physical proximity to the victim or hostage to threaten them which leaves behind physical evidence. Overall, I’m not sure you gain much by demanding payment in crypto over cash.

corpMaverick 5y ago
> I’ll file a police report with the addresses You are assuming you are still alive.
vmception 5y ago
You can script tornado.cash deposits This amount would be up to half of the tornado cash anonymity pool, but can be withdrawn over time they can always withdraw a bunch of tornado cash notes to virgin addresses and pump a random cryptocurrency they already own and bought with their separate clean money if $SHIBDOGE rises 30,000% because virgin tornado cash funded whales are buying it, the prior owners are just going to be seen as lucky traders indistinguishable from the rest, all with clean money. one of those owners would ideally already own a lot of the chosen token and be the bridge exploiter. they will be seen as having much more clean money after selling their pumped crypto.
jbkiv 5y ago
In a previous life I was involved in K&R (kidnap & ransom) insurance. You just pay the ransom and never recover your money, so you price the insurance contracts accordingly. The police: "we don't prosecute those crimes" , "this is not our juridiction", "why don't you try the FBI?" I used to work in the Presidio of San Francisco. An ex military base. The only canons left are from the 1800's. I needed to file a police report (car theft), called the Police in San Francisco. OK, what's your address? Sorry, we don't handle those cases, call the Federal Police. Then later we had to file a lawsuit, so based on previous experience we filed in Federal Court. They told us, sorry even though you are on Federal land, you must file in a California court. Go figure. Just to say that nobody can help our dear crypto bros. BTW did you declare the existence and the amount of your crypto holdings last year? Oops, now you'll regret that police report you filed (goes into waste basket) and you have to deal with the IRS. The crypto world is better than the proverbial kid in the candy store.

paulpauper 5y ago

No one has been arrested either for defi hacks. perfect crime.

erehweb 5y ago

Here's one example - https://www.newsweek.com/bitcoin-millionaire-zaryn-dentzel-beaten-fortune-stolen-masked-robbery-cryptocurrency-1645550 https://www.newsweek.com/bitcoin-millionaire-zaryn-dentzel-b... and another - https://www.coindesk.com/markets/2018/01/29/uk-crypto-trader-forced-to-hand-over-bitcoin-at-gunpoint/ https://www.coindesk.com/markets/2018/01/29/uk-crypto-trader...

manquer 5y ago

No different for crypto. What I can I do with 100's of millions of dollars worth of tainted ETH ? The only thing you can really buy with coins are NFTs, if I want to buy a house or car or plane or whatever with the loot, I still have to convert that ETH to cash, major exchanges will blacklist these tokens, washing services/ coins cannot easily handle this volume, extracting value out of this size is just as complicated as regular crime.

SXX 5y ago
> What I can I do with 100's of millions of dollars worth of tainted ETH ? For instance you can spent few millions and get literally every re-used address tainted. Just sent $1 worth of ETH to top 1,000,000 single address holding meaningful amount of ETH, or expensive NFTs, etc. Then every legit exchange will have huge issue with maintaining blacklists. Oh and you can also sent 1 million to random people and 1 million to your own addresses. Or just sell some of your crypto on P2P exchange at 2-3x rate with collateral. There will be literally thousands of people who gonna be happy to accept your tainted ether if you pay them good enough. PS: So I literally see tons of opportunities how to do this kind of mixing. Yeah you'll lose huge percent of money, but even half of 300 millions is a lot of money.
mhitza 5y ago
> What I can I do with 100's of millions of dollars worth of tainted ETH ? You wash them through different coin swap contracts. Even losing $10 million worth, in gas/processing fees, is just 3.125% at the current estimated value.