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One of the prominent developers behind the Bitcoin blockchain said he asked the FBI to help him recover the $3.6 million digital coin that was stolen from his custody wallets on New Year’s Eve.
Luke Dashjr is a developer of the Bitcoin Core, an app that runs 97 percent of the nodes that make up the Bitcoin blockchain. Bitcoin Core derives from the software developed by the anonymous Bitcoin inventor using the pen name Satoshi Nakamoto. This software was simply called Bitcoin but was later changed to Bitcoin Core to distinguish it from the coin. Dashjr has been a contributor to Bitcoin Core since 2011 and has long championed the concept of decentralization on which the cryptocurrency was founded.
“What the hell, FBI?”
On New Years Day, Dashjr went to twitter to report that his entire bitcoin holdings — worth about $3.6 million — are “basically all gone.” He said the hack was due to the compromise of a PGP (Pretty Good Privacy) key he used to ensure his downloads from Bitcoin Core and a smaller app called Bitcoin Knots weren’t riddled with malware. He said all of his computers were compromised and urged people to hold off on downloading new versions for the time being.
“So to be clear, DO NOT DOWNLOAD ANY BITCOIN NODES AND TRUST IT UNTIL THIS IS RESOLVED,” he wrote. “If you’ve already done this in the past few months, consider shutting down that system for now.”
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Dashjr did not respond to an interview request.
In the same thread, the developer said he contacted the FBI and the police but received no response.
“What the hell @FBI @ic3. Why can’t I reach anyone???” he wrote. “I paid these taxes and the police don’t care. What a scam.”
Dashjr said the compromised wallets are both hot – meaning they are accessible via the internet – and whatever he thought were cold – meaning they were hosted on a device that wasn’t connected to the internet. He didn’t elaborate, but it seems he theorized that one or more computers he was using were infected and that the hackers could then get hold of the funds stored on them. It’s hard to understand, however, because a wallet stored on an internet-connected device is, by definition, hot.
That issue aside, the theory could align with an injury to Dashjr reported Nov. During this incident, the developer said, “the hackers bypassed my software security measures by rebooting the server from an unknown storage device. Another system ran for about 5 minutes.” The hackers then installed two or three remote shell backdoors.
There is still much that does not fit with the events that Dashjr reported. Without more details, it’s difficult to come to firm conclusions. One lesson is clear, however, as evidenced by one of Bitcoin’s most influential developers urging law enforcement to recover his stolen digital coin: The idea of cryptocurrencies offering a decentralized platform that shuts down established authorities is nothing short of pipe dream.