thecoinrepublic.com
- 1 The hacker behind the biggest crypto hack revealed the hacking tricks used.
- 2 In 2016, hackers succeeded in withdrawing nearly $4.5 Billion in Bitcoin.
- 3 The Bitcoin Fog tactic was allegedly used for the hack.
Hacks and scams in the crypto world are evolving as hackers develop new tricks and tactics. On February 27, Ilya Lichtenstein, the mastermind behind the biggest Bitcoin (BTC) hack appeared as a cooperating US government witness and shared details of the $4.5 Billion Bitcoin hack. Bitcoin Fog trick helped Lichtenstein to attempt the biggest heist in the crypto world.
How the crypto hack was attempted
In 2016, Bitfinex, one of the longest-operating and most liquid major cryptocurrency exchanges was hacked. In that attack, Bitcoin worth $4.5 Billion was robbed in one of the largest crypto exchange breaches.
Ilya Lichtenstein pleaded guilty to laundering Billions from a crypto exchange.
On Tuesday, in a money laundering trial in Washington, Lichtenstein appeared as a cooperating witness and revealed the whole scenario behind the hack.
Bitcoin Fog, a Bitcoin tumbler service that permits individuals to blend their Bitcoins with other users’ Bitcoin in a wallet was the strategy used by Lichtenstein.
As a part of the hack, Lichtenstein first gained access to the cryptocurrency exchange system for an extended period. He then managed to intercept custom credentials to access accounts through password reuse.
After gaining the required credentials, the hacker used a service like Bitcoin Fog to hustle the source of the asset. To hide the transactions, Lichtenstein used the particular service around 10 times and stole tens of millions in digital assets using the same.
He used credentials to drain BTC from the exchange, deposited the loot across various cryptocurrency exchanges, and used mixers and fake IDs to cover his tracks. Additionally, he hacked other exchanges including Coinbase and Kraken.
While unveiling the details, he also enlisted his wife Heather Morgan, who supported him in the hack. Morgan, considered “The Crocodile of Wall Street,” helped Lichtenstein create various fake IDs to hide the money trail.
The government claimed that the two used fake IDs to hide the transactions as well as to set up online accounts. Also, the stolen amount was used for buying Non-fungible tokens (NFTs), gold, and Walmart gift cards.
However, he eventually stopped using the Bitcoin Fog as he came across other mixers like Helix, which was once used by Larry Harmon in 2021.
Bitcoin’s current performance
BTC had crossed the $57,790.82 mark which is an upsurge of 3.30% in one day at press time. BTC’s market cap stood at $1,137,190,298,556 and the 24-hour volume is $39,390,884,151.
Bitfinex, launched in 2012, is one of the most liquid cryptocurrency exchanges. The platform was owned and managed by iFinex Inc. and delivers a wide range of services including margin trading, exchange trading, margin funding (P2P lending), derivatives trading, and over-the-counter markets.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.