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Canadian Authorities Seek Help Identifying Bitcoin ATM Double-Spenders

www.cryptoglobe.com 13 March 2019 14:02, UTC
Reading time: ~2 m

Authorities in Canada are reportedly looking for help identifying four suspects of conducting double-spend attacks on Bitcoin ATMs throughout the country, potentially taking advantage of these accepting 0-confirmation transactions.

According to the CBC, the four suspects managed to make over CAD $200,000 ($150,000) through the attacks, in which they managed to conduct 112 fraudulent transactions in seven cities in Canada, half of which in Calgary.

The attacks were carried out for 10 days in September of last year. Besides Calgary, the suspects also conducted double-spend attacks on Bitcoin ATMs in cities like Toronto, Montreal, Winnipeg, Ottawa, and more.

Authorities believe the individuals have n-depth knowledge or interest in cryptocurrency, bitcoin and/or blockchain technology." They seemingly managed to steal the funds by taking advantage of the Bitcoin ATMs accepting 0-confirmation transactions.

CCN points out that replace-by-fee tools developed by Canadian Bitcoin Core developer Peter Todd could have been used in the attack. The tools themselves weren’t created for such activities, but allow for “stuck” transaction to go through using additional fees.

There is, however, a “double-spend” tool. That creates two transactions in succession, one paying a specific amount to a specific address, and a second one double-spending that transaction.

Per Todd, it also allows users to “optionally specify that the first transaction additional OP-RETURN, multisig, and “blacklisted” address outputs.” He added:

Some miners won’t accept transactions with these output types; those miners will accept the second double-spend transaction, helping you achieve a successful double-spend.

Looking for the suspects, Calgary Police are being aided by other law enforcement agencies, including the Toronto Police, the Winnipeg Police Service, and more. Those with information on the case can submit anonymous tips.

The development comes after criminals snatched a cryptocurrency ATM in a California bakery break-in. According to CoinATMRadar, there are over 4,400 Bitcoin ATMs in the world, and reports seem to suggest criminals are increasingly targeting them.

0-confirmation transactions are somewhat controversial, as while some point out they aren’t as secure as transactions that wait for more confirmations on the BTC blockchain, others claim they are a necessity to not have customers who want to spend funds wait for these confirmations.

As CryptoGlobe covered, however, waiting for confirmations may not be the only problem bitcoiners may have while paying for everyday goods using BTC, as even paying for coffee with the cryptocurrency could lead to tax headaches.

Featured image of the suspects from the Calgary Police Service.

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