Unknown attackers stole more than 200 BTC from Bitcoin Core developer

Bitcoin Core developer Luke Dashjr disclosed that his PGP-key had been compromised and a large amount of BTC was lost.

Looks like some of it is coinjoined to 1YAR6opJCfDjBNdn5bV8b5Mcu84tv92fa

— @LukeDashjr@BitcoinHackers.org on Mastodon (@LukeDashjr) January 1, 2023

Dashjr did not specify the amount stolen. In the thread he shared the address allegedly linked to the breach — at the time of writing it contains 216.9 BTC (more than $3.6 million at current rates). Four transactions were executed on December 31, 2022.

According to the developer, he “has no idea” how the attackers gained access to his key. When asked why he noticed the breach so late, Dashjr explained that he only spotted it after receiving emails from Coinbase and Kraken about login attempts.

I only noticed at all because @Coinbase and @kraken were emailing me about login attempts

I’ve been sick in bed

— @LukeDashjr@BitcoinHackers.org on Mastodon (@LukeDashjr) January 1, 2023

Binance chief executive Changpeng Zhao responded to the incident. He said he informed the exchange’s security team about the need to monitor.

Sorry to see you lose so much. Informed our security team to monitor. If it comes our way, we will freeze it. If there is anything else we can help with, please let us know. We deal with these often, and have Law Enforcement (LE) relationships worldwide.

— CZ 🔶 Binance (@cz_binance) January 1, 2023

«If there is anything else we can help with, please let us know. We deal with these situations often, and we have relationships with law enforcement agencies worldwide», wrote Zhao.

In November, Binance’s head called self-custody of assets “one of the fundamental rights”, but warned of “costly mistakes”. On January 2 he reminded that such an approach “has a different set of risks”.

Sad to see even an OG #Bitcoin Core Developer lost 200+ BTC ($3.5 million). Self custody have a different set of risks.

We will try to monitor and see where we can help. 🙏 https://t.co/9eGZ7AFgC2

— CZ 🔶 Binance (@cz_binance) January 1, 2023

A Reddit user going by SatStandard suggested that Dashjr “did not take the security breach from 17 November seriously enough.” He added that the developer used a hot wallet “on the same computer where he did everything else”.

Crypto community members expressed concern. One noted that if the Bitcoin Core developer could become a victim of a hack, then “most people have little hope.”

You’ve definitely been one of the most security conscious folks I’ve known in this space, so this is a little shocking. 😳 I’m not sure many would be able to have useful insight, unfortunately.

If this can happen to you, there’s little hope for most people, sadly.

— Jason Hughes (@wk057) January 1, 2023

Other commentators backed this view and noted that such incidents cast doubt on Bitcoin’s mass adoption.

Honestly this is a fair point. Mass adoption is a pipe dream if a top btc dev can’t even keep his wallet secure.

— CatOfWallSt.eth (@CatOfWallSt) January 2, 2023

«Mass adoption is a pipe dream if a top Bitcoin developer can’t even keep his wallet secure», wrote a user.

Analyst Namcios noted that the community’s reaction is not a fair assessment of the situation. He said that even an experienced specialist like Dashjr is not immune to mistakes.

4/ Luke, as any core dev, has a level of bitcoin knowledge that most people don’t.

But this doesn’t mean he can’t make mistakes.

So Udi’s equivalence of ‘if he messed up nobody should self custody’ is dumb. That leap can’t be taken.

— Namcios (@namcios) January 1, 2023

Earlier, Ledger and Trezor reported a significant surge in sales of devices amid the FTX collapse.

In December, Paxful’s CEO Ray Youssef spoke in favour of self-custody of BTC rather than centralized exchanges.

In November, the Web3 industry lost $391.6 million due to 29 exploits, including the Deribit hot-wallet breach and the theft of FTX funds, according to PeckShield.

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