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2020 Bitcoin and Altcoin Hacks [Part 12]

This article is part of our complete guide to Bitcoin and altcoin hacks. Here we cover Bitcoin and altcoin security incidents from the year 2020.

2020 has been an unusual year from multiple angles. The COVID-19 pandemic took investors on a wild ride, with Bitcoin ranging from U$ 4,100 to U$ 12,200 in the first 6 months of the year.

June

Wallet Brute Forced

In June 2020, Lightning Network developer John Cantrell was able to brute force a Bitcoin wallet to recover its keys in under 30 hours.

This is a grassroots Bitcoin hack, in the sense that Cantrell actually did beat the cryptographic system at what it was supposed to do best – avoid brute force.

What he did was try permutations of 12 word mnemonics used to recover a wallet. The process involved :

  • Building the 12 word combination
  • Deriving the private key from the new mnemonic
  • Deriving the public key from the private one
  • Deriving a public Bitcoin address from the public key
  • Testing this Bitcoin address against his target

To achieve this, Cantrell implemented his own brute force software in OpenCL – an open standard for GPU processing. Find technical details here.

July

The Twitter Hack

Every major news outlet has called the July Twitter hack a “Bitcoin hack”. This is an incorrect approach that shows just how much the media is biased against cryptocurrencies in general.

Calling the Twitter hack a “Bitcoin scam” is like calling every bank robbery a “dollar scam”.

However, there are some aspects about this hack we could discuss in the context of cryptocurrencies. Especially how amateurish it all seems to be.

As Larry Cernak of The Block pointed out, the subsequent Bitcoin mixing job was absolutely sloppy.

It’s trivial for law enforcement to track down whoever is behind this Bitcoin activity.

As we’ve pointed out in previous articles, Bitcoin is a permanent and immutable record of financial transactions. Doing anything illegal on the blockchain generates a trace that lasts forever. Contrary to the mostly negative image of cryptocurrencies propagated by mainstream media, blockchain makes transactions much more transparent than other financial instruments used by criminals.

August 2020

Realistic Signals Group

Read our main article about the RSG scandal here.

September 2020

Israeli SS7 Telegram Hack

While not directly related to cryptocurrencies, the SS7 hack targetted Israelis somehow linked to cryptocurrency work. Hackers exploited Signaling System 7 (SS7) in order to gain access to users’ Telegram accounts.

Slovenia Eterbase Hack

Slovenian exchange Eterbase was hacked on September 10, causing an estimated U$ 5 million losses.

Eterbase Telegram announcement.

Eminence DeFi Hack

Late September saw yet another DeFi smart contract exploited.

Unaudited DeFi code made yet another victim, costing the community around U$ 15 million.

KuCoin Hack

On September 26, KuCoin revealed a major hack involving Bitcoin and Ethereum. The total amount may have been over U$ 150 milllion.

Links

Major Chilean bank shuts down all branches following ransomware attack

KuCoin hack unpacked: More crypto possibly stolen than first feared

Return to the main article: The complete guide to Bitcoin and altcoin hacks

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