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> partially voided, with the reversal being worth slightly more than $70 million due to Bitcoin volatility. This didn’t happen an hour later; it happened in 20

> partially voided, with the reversal being worth slightly more than $70 million due to Bitcoin volatility. This didn’t happen an hour later; it happened in 2022. How? > The answer is nowhere in the Bitcoin whitepaper or any codebase. A full recounting of it is outside the scope of this anecdote, but it rhymes with “If you and the United States federal government disagree whether a transaction is final, you are wrong.” Following the link in that quote, that didn't happen because Bitcoin wasn't final after all, just because the government "disagreed." It happened because the government found the criminals' private keys, and made a new transaction. Back to the first article, it continues with this: > That is true for notorious Bitcoin thefts, but also true for wire transfers I'm wondering how it is then that theft by wire fraud is a serious problem these days.

alisonkisk 5y ago
lxgr 5y ago
What do you mean by "theft by wire fraud"? As far as I understand, "wire fraud" has almost nothing to do with wire transfers.
- DennisP 5y ago
  I mean by sending someone fraudulent wire instructions. It's been a problem in real estate transactions, mainly with consumers receiving instructions by email. Also, businesses have been hit in social engineering attacks that end up with instructions to send a wire. These situations can be reversed if discovered fast enough, but after a few hours the funds are moved internationally and you're very unlikely to get your money back.
  - repomies69 5y ago
    It depends on how well the fraud is executed, how long time has been passed since the fraud happened and also on the amounts and people/organisations involved. Technically kalzumeus might be right, however practically it almost always makes sense to think that wire transfer is final, and treat it that way. If a con man tricks you into wiring funds to a wrong address, it is quite likely gone. However with credit card payments you can be more relaxed, and so on.
outworlder 5y ago
> I'm wondering how it is then that theft by wire fraud is a serious problem these days. The article touches briefly on that. Some wire transfers can be reversed. It becomes more difficult when money starts moving around jurisdictions, but at least it's possible. Essentially no crypto transactions can be reversed.
- gzer0 5y ago
  If this is the case, how was North Korea able to wire fraud $81 million USD from the Bank of Bangladesh [1] ? Why was this wire transaction not reversed? Apparently, they were about to get away with $1 billion USD but the hacker entered the global SWIFT code incorrectly by 1 character and so it was caught. The fact that North Korea made off with $81 million USD, however, is rather unsettling, and even more so the fact that this was not reversed / caught. [1] https://www.bbc.com/news/stories-57520169 https://www.bbc.com/news/stories-57520169
  - roywiggins 5y ago
    They recovered $18m of that by grabbing one of the accounts it got sent to in the Philippines, so it was actually partially reversed.
  - rags2riches 5y ago
    They did of course not wire the money directly to North Korea. It was a multi-step process of money laundering, involving currency exchanges, cash and casinos, in several jurisdictions. Every authority along the way must be on board with the reversal. When the chain is broken, as when cash is laundered at a casino, somebody will be left holding the bag. You can't reverse the cash back out of thin air. Had all the money been found still sitting pretty in an account, I assume things would have eventually been all settled.
- littlestymaar 5y ago
  > Essentially no crypto transactions can be reversed. Bitcoin transactions are hard to reverse (not strictly impossible, as shown by the recent example, and a few others of the same vein, but it requires to arrest the key owner and seize the key, which is obviously kind of hard) but practically all other cryptocurrencies are centralized enough to allow for transaction reversal (The ethereum hard fork after the DAO hack is the practical example of this). And I'm not even talking about weak chains for which an attacker can even reverse transaction against everybody else's will[1]… [1]: https://www.coindesk.com/markets/2020/08/29/ethereum-classic-hit-by-third-51-attack-in-a-month/ https://www.coindesk.com/markets/2020/08/29/ethereum-classic...
cryptica 5y ago
Agreed, the Bitcoin transaction(s) which stole and moved the funds out of the exchange did have finality. The entire premise of crypto is that whoever knows the private key controls the account... So this is essentially a seizure of an account. The seizure of funds has nothing to do with finality and everything to do with laziness, complacency and neglect. If the hacker had hidden their private keys in a secret location (or just memorized them), they could almost certainly have gotten away with it. The hackers were extremely neglectful. It's a testament to Bitcoin's security that it took so many years to be caught given this level of carelessness and the massive amount of money involved. Some people in the Bitcoin community think the news is fake and intended to harm Bitcoin's reputation... We don't know what really happened behind the scenes. It's hard to believe that people can be so careless.
- DennisP 5y ago
  I don't see why it would harm Bitcoin's reputation. It's always been clear that you have to be careful with your keys, and extraordinarily careful if you want to protect them from the government.

alisonkisk 5y ago

lxgr 5y ago

What do you mean by "theft by wire fraud"? As far as I understand, "wire fraud" has almost nothing to do with wire transfers.

DennisP 5y ago
I mean by sending someone fraudulent wire instructions. It's been a problem in real estate transactions, mainly with consumers receiving instructions by email. Also, businesses have been hit in social engineering attacks that end up with instructions to send a wire. These situations can be reversed if discovered fast enough, but after a few hours the funds are moved internationally and you're very unlikely to get your money back.
- repomies69 5y ago
  It depends on how well the fraud is executed, how long time has been passed since the fraud happened and also on the amounts and people/organisations involved. Technically kalzumeus might be right, however practically it almost always makes sense to think that wire transfer is final, and treat it that way. If a con man tricks you into wiring funds to a wrong address, it is quite likely gone. However with credit card payments you can be more relaxed, and so on.

outworlder 5y ago

> I'm wondering how it is then that theft by wire fraud is a serious problem these days. The article touches briefly on that. Some wire transfers can be reversed. It becomes more difficult when money starts moving around jurisdictions, but at least it's possible. Essentially no crypto transactions can be reversed.

gzer0 5y ago
If this is the case, how was North Korea able to wire fraud $81 million USD from the Bank of Bangladesh [1] ? Why was this wire transaction not reversed? Apparently, they were about to get away with $1 billion USD but the hacker entered the global SWIFT code incorrectly by 1 character and so it was caught. The fact that North Korea made off with $81 million USD, however, is rather unsettling, and even more so the fact that this was not reversed / caught. [1] https://www.bbc.com/news/stories-57520169 https://www.bbc.com/news/stories-57520169
- roywiggins 5y ago
  They recovered $18m of that by grabbing one of the accounts it got sent to in the Philippines, so it was actually partially reversed.
- rags2riches 5y ago
  They did of course not wire the money directly to North Korea. It was a multi-step process of money laundering, involving currency exchanges, cash and casinos, in several jurisdictions. Every authority along the way must be on board with the reversal. When the chain is broken, as when cash is laundered at a casino, somebody will be left holding the bag. You can't reverse the cash back out of thin air. Had all the money been found still sitting pretty in an account, I assume things would have eventually been all settled.
littlestymaar 5y ago
> Essentially no crypto transactions can be reversed. Bitcoin transactions are hard to reverse (not strictly impossible, as shown by the recent example, and a few others of the same vein, but it requires to arrest the key owner and seize the key, which is obviously kind of hard) but practically all other cryptocurrencies are centralized enough to allow for transaction reversal (The ethereum hard fork after the DAO hack is the practical example of this). And I'm not even talking about weak chains for which an attacker can even reverse transaction against everybody else's will[1]… [1]: https://www.coindesk.com/markets/2020/08/29/ethereum-classic-hit-by-third-51-attack-in-a-month/ https://www.coindesk.com/markets/2020/08/29/ethereum-classic...

cryptica 5y ago

Agreed, the Bitcoin transaction(s) which stole and moved the funds out of the exchange did have finality. The entire premise of crypto is that whoever knows the private key controls the account... So this is essentially a seizure of an account. The seizure of funds has nothing to do with finality and everything to do with laziness, complacency and neglect. If the hacker had hidden their private keys in a secret location (or just memorized them), they could almost certainly have gotten away with it. The hackers were extremely neglectful. It's a testament to Bitcoin's security that it took so many years to be caught given this level of carelessness and the massive amount of money involved. Some people in the Bitcoin community think the news is fake and intended to harm Bitcoin's reputation... We don't know what really happened behind the scenes. It's hard to believe that people can be so careless.

DennisP 5y ago
I don't see why it would harm Bitcoin's reputation. It's always been clear that you have to be careful with your keys, and extraordinarily careful if you want to protect them from the government.