There is a scene that is repeated in robbery films: Without exception, a gang of bank robbers demands a large sum in "small, unmarked bills".
This is a wise provision (regardless of whether this is common in real bank robberies or not). "Not marked" means that the serial numbers have not been recorded by the police. The numbers of the bills should also be random and not consecutive, which makes it more difficult to determine if they are "dirty". The aim is to prevent law enforcement from later identifying and blacklisting the unlawful loot.
This brings us to last week's Twitter violation: The bitcoin caught by the hackers is very "marked".
In case you missed it, a group of hackers compromised prominent Twitter accounts last week and used them to get viewers to send them Bitcoin. By stealing access to an internal Twitter admin tool, the hackers were able to take control of valuable accounts and issue scam tweets from them, including accounts from cryptocurrency companies like Coinbase and Binance, and celebrities like Kim Kardashian. Joe Biden and Jeff Bezos.
The hackers' trick, according to an analysis by Chainalysis, a cryptocurrency tracing company, cost 13.14 bitcoins or around $ 120,000. Some of these around $ 20,000 bitcoins are believed to have come from the hackers themselves to make the fraud seem legitimate early on, while a further 7.88 bitcoin – about $ 66,000 – were mixed in from unknown sources later, for total holdings of around 21 bitcoins, the company said.
However, there is a problem: As already mentioned, Bitcoin is inherently labeled as money. Every single Bitcoin is logged in a global blockchain ledger that can be viewed by everyone. Whenever a Bitcoin moves, anyone can follow it.
Immediately after the attack, I noticed that it would be crazy for the fraudsters to try to withdraw money. Law enforcement agencies are focused on all involved Bitcoin wallets. On the other hand, the hackers were crazy enough to commit the crime at all, so maybe they will actually run to the finish line.
In fact, the illegal bitcoin has moved out of three original scam wallets several times since the big hack. Part of the money, around 9 bitcoins, is now in 23 purses, Chainalysis said. (Smaller amounts are split across an even larger number of Bitcoin addresses.) About 8 Bitcoins were transferred to “mixers,” including Wasabi and ChipMixer, online services to disguise and hide cryptocurrency movements. 4 Bitcoins were sent to other, as yet unspecified, locations, the company said.
Dave Jevens, CEO of CipherTrace, another cryptocurrency tracking company, says hackers are trying to "obscure" the flow of money through a process called "peeling." This involves gradually sending fragments of the loot into mixers and exchanges, which multiply the complexity of the transaction chains and make it difficult to track them. (Jevens suspects that in some cases the hackers are simply trying to "troll" investigators.)
Bitcoin's move after last week's Twitter HackCiphertrace
Such antics may be difficult to track for a human, but they do not fit computers. Maddie Kennedy, a spokesman for the chain analysis, notes that the “main tactic” of money launderers – the use of mixers – “is often understandable”. She adds: "With a lot of eyes on the stolen money, all of the perpetrators' counterparties are carefully examined."
Tom Robinson, the chief scientist and co-founder of Elliptic, another Bitcoin tracing company, says hackers need to use unregulated foreign exchange that collects minimal user data to maintain anonymity. From there, they were able to convert bitcoin into so-called "coin swap" services in cryptocurrencies such as zcash or Monero, which are difficult to understand and protect privacy.
"It is very difficult to mask all of your activities when using a system that is as transparent as Bitcoin," said Robinson. "It is likely that the hackers can withdraw money in some way, (but) the question is whether they can do it in a way that cannot be attributed to them."
What will follow is a high-tech version of an old trick: the shell game. Under the Fed's nose, the money launderers will test their ability to claim the loot by mixing the Bitcoin in a complicated dance of digital cups through mixers and swappers. Time will tell if the hackers' legends are adept enough to evade justice.
But most of us already know how these films end.