What happens if you hack 4.5 billion BTC? // The Code Report

Blockchain networks are virtually unhackable, but crypto exchanges not so much. In 2016, hackers stole 4.5 billion in BTC from the Bitfinex exchange – in 2022 they were busted trying to launder the money. Let’s take a look at security on crypto exchanges.

#crypto #hacking #TheCodeReport

🔗 Resources

DOJ Documents https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency
Bitfinex hack https://en.wikipedia.org/wiki/2016_Bitfinex_hack
Blockchain in 100 Seconds https://youtu.be/qF7dkrce-mQ

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🔖 Topics Covered

– 2016 Bitfinex hack
– Arrest of Ilya Lichtenstein and Heather Morgan
– How does bitcoin get hacked
– Are crypto exchanges safe?
– Cold wallet vs Hot wallet
– Multi-signature wallets
– RazzleKhan rapper

It is february 10 2022 and you’re watching the code report the most trusted name in tech news the neat thing about cryptocurrency is that it’s trustless and that means when you put your hard-earned paycheck from wendy’s into a crypto exchange and somebody steals it you’ll probably never get that

Money back but simultaneously it’s not an anonymous safe haven for criminals either your classic lose-lose back in 2016 somebody stole 120 000 bitcoins worth 71 million dollars from the bitfinex exchange by accessing the private keys of users today those bitcoins are worth 4.5 billion dollars making the hackers some of the richest

People on the planet but there’s just one problem bitcoin is a giant public ledger and you can’t move your money around without the feds watching your every move and last week they recovered 94 000 of the stolen bitcoins and arrested the husband and wife duo of ilia lichtenstein and heather morgan

Ladies and gentlemen we got him the saddest part of the story is that heather was an up-and-coming rapper At least now she does know where she’s headed the couple is facing up to 20 years in prison for attempting to launder the stolen bitcoin it’s not clear if they’re the ones that actually performed the hack back in 2016 though documents from the department of justice break down how they would move the

Currency with a diverse array of transactions like purchasing altcoins and nfts and then breaking everything down into thousands of smaller transactions where the funds would eventually flow into a business that could fund heather’s music videos they get an a for effort but bitcoin’s not like a gold bar that you can just melt

Down and sell on the black market on the bright side though many of my favorite rappers have done time in prison another big question here is will the original owners be able to recover their funds bitfinex already attempted to make customers whole by crediting them with a different token when the hack occurred

They are working with the department of justice but it will likely be a very long and complicated process before anyone gets their bitcoin back if it happens at all but what about your bitcoin is it safe in an exchange right now well the blockchain network itself is virtually unhackable with current

Technology crypto exchanges on the other hand are very much hackable the thing about cryptocurrency is that when someone obtains your private key they have access to all of your money and can send it wherever they want there’s no central authority to detect or stop fraudulent transactions but they do

Implement other measures to keep your token safe one is multi-signature wallets that require multiple private keys to send a transaction the other thing they do is try to keep as much crypto in cold storage as possible there are two types of crypto wallets a hot wallet which is always connected to the

Internet and ready to send transactions and the other is a cold wallet which is offline and generally used for long-term storage of your money a cold wallet can only be hacked if you have physical possession of the device exchanges like coinbase keep 90 of your crypto in cold

Storage and because they’re a big centralized authority if they ever got hacked they’d have enough money to pay everybody off there are stories of crypto exchanges being hacked all the time but it is pretty safe for most people today but if you’re really attached to your tokens the safest thing

To do is get them out of an exchange into your own cold storage wallet then move out of the city and learn how to grow your own food dig a bunker on your property and store the wallet there alongside your gold and ammo this has been the code report thanks for watching

And i will see you in the next one