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I don't think it was an inside job, it's actually pretty hard to wash $600m+ of blockchain funds already (it's highly traceable). Doing it as an insider would b

I don't think it was an inside job, it's actually pretty hard to wash $600m+ of blockchain funds already (it's highly traceable). Doing it as an insider would be truly insane. The whitelisting wasn't a secret. Axie DAO is an open community, so it's easy to have known the whitelist existed and was left in. It was a very bad idea, but what can I say, people get cocky and make mistakes. The only difference in crypto is that it has a built-in bug bounty of losing stored funds like this, so you have to take security incredibly seriously, and they didn't.

finnh 5y ago
> Doing it as an insider would be truly insane Why? The concerns (how to steal the money, how to launder/tumble it) seem orthogonal. Random question: is there a statute of limitations on this type of theft? If so, insiders would be highly incented to steal 600M today and then wait X years before using that one-time, anonymous wallet.
- carlosdp 5y ago
  Because any investigative firm would first look at the very small set of insiders first, and it's harder than one would think to truly hide their tracks, especially since this was a traditional infra attack and not just an on-chain smart contract hack. The fact that the FBI was able to recover the Colonial Pipeline hack funds from the hacker Bitcoin wallet, something that should have been theoretically almost impossible, basically told me that if you steal enough money for the feds to get interested, you better be in a country where they can't get to you.
- SkyMarshal 5y ago
  It's definitely possible it could have been an insider, but I think it probably wasn't this time. In this case, Occam's Razor suggests an outside job. Reasoning: First, as carlosdp points out, insiders are the first suspect, everyone knows that now, and the FBI has advanced methods of finding them and recovering the funds. There's more deterence factor now. Second, hacking cloud infrastructure for industrial secrets and the like is so common these days, there are tons of black hat hackers and groups around the world that specialize in that. Third, the hack was simple once it was realized that the 5th of 9 signing keys was compromised by the whitelist. Combine that bit of information with #2 and it's essentially a guarantee that someone will make an attempt at it. Fourth, due to war in Ukraine, the world is in an elevated state of cyber warfare now. On top of the usual criminal hackers just looking to steal money, Russian and their allied hackers are seeking ways of stealing money to break sanctions, and/or disrupt financial systems in the West. All this just increases the odds the attack came from outside the org.
mhitza 5y ago
600+mil is a lot. But realistically how hard is it to bridge it over to Monero/Zcash/other privacy preserving coins, then slowly funnelling them back in to ethereum for an exchange? Unless all swap contracts are updated to somehow keep track of any funds associated with the hackers original address, washing up those funds it's just a matter of time, no?
- carlosdp 5y ago
  It's not hard to do, but it is unlikely to provide the privacy protection you want against any sophisticated chain analyzer, like Chainalysis. Those ZK-pool based mechanisms all depend on the amounts being significantly smaller than the total pool in order to attain reasonable levels of anonymity. Unless you intend to take out incredibly small sums over time (at which point, why take 600m), statistical methods will flag you eventually. I guess maybe if you wait long enough, in theory those pools could get big enough to allow you to more safely retrieve larger sums. But all the while you are trying to hide this from coworkers and not tell a single soul and live below your means. Easier ways to make a ton of money in crypto right now that don't put you in jeopardy of jail time if/when you screw up.
  - mhitza 5y ago
    > why take 600m Just because that was the amount locked in contracts :) If you have that much money you'll find ways to funnel them out while keeping anonymity. Heck, even selling tokens in real life at half their market value is an option if you're desperate.

finnh 5y ago

> Doing it as an insider would be truly insane Why? The concerns (how to steal the money, how to launder/tumble it) seem orthogonal. Random question: is there a statute of limitations on this type of theft? If so, insiders would be highly incented to steal 600M today and then wait X years before using that one-time, anonymous wallet.

carlosdp 5y ago
Because any investigative firm would first look at the very small set of insiders first, and it's harder than one would think to truly hide their tracks, especially since this was a traditional infra attack and not just an on-chain smart contract hack. The fact that the FBI was able to recover the Colonial Pipeline hack funds from the hacker Bitcoin wallet, something that should have been theoretically almost impossible, basically told me that if you steal enough money for the feds to get interested, you better be in a country where they can't get to you.
SkyMarshal 5y ago
It's definitely possible it could have been an insider, but I think it probably wasn't this time. In this case, Occam's Razor suggests an outside job. Reasoning: First, as carlosdp points out, insiders are the first suspect, everyone knows that now, and the FBI has advanced methods of finding them and recovering the funds. There's more deterence factor now. Second, hacking cloud infrastructure for industrial secrets and the like is so common these days, there are tons of black hat hackers and groups around the world that specialize in that. Third, the hack was simple once it was realized that the 5th of 9 signing keys was compromised by the whitelist. Combine that bit of information with #2 and it's essentially a guarantee that someone will make an attempt at it. Fourth, due to war in Ukraine, the world is in an elevated state of cyber warfare now. On top of the usual criminal hackers just looking to steal money, Russian and their allied hackers are seeking ways of stealing money to break sanctions, and/or disrupt financial systems in the West. All this just increases the odds the attack came from outside the org.

mhitza 5y ago

600+mil is a lot. But realistically how hard is it to bridge it over to Monero/Zcash/other privacy preserving coins, then slowly funnelling them back in to ethereum for an exchange? Unless all swap contracts are updated to somehow keep track of any funds associated with the hackers original address, washing up those funds it's just a matter of time, no?

carlosdp 5y ago
It's not hard to do, but it is unlikely to provide the privacy protection you want against any sophisticated chain analyzer, like Chainalysis. Those ZK-pool based mechanisms all depend on the amounts being significantly smaller than the total pool in order to attain reasonable levels of anonymity. Unless you intend to take out incredibly small sums over time (at which point, why take 600m), statistical methods will flag you eventually. I guess maybe if you wait long enough, in theory those pools could get big enough to allow you to more safely retrieve larger sums. But all the while you are trying to hide this from coworkers and not tell a single soul and live below your means. Easier ways to make a ton of money in crypto right now that don't put you in jeopardy of jail time if/when you screw up.
- mhitza 5y ago
  > why take 600m Just because that was the amount locked in contracts :) If you have that much money you'll find ways to funnel them out while keeping anonymity. Heck, even selling tokens in real life at half their market value is an option if you're desperate.