crypto theft
Cryptocurrencies

Two hacker groups are responsible for more than $1 billion in cryptocurrency thefts

Crypto investigation software maker Chainalysis believes the two groups are responsible at least 60% of all crypto thefts

More than $1 billion worth of cryptocurrency has been stolen by just two major hacking groups, according to a new report by Chainalysis.

The company, which provides software to help law enforcement investigate illegal cryptocurrency transactions, as well as know your customer (KYC) tools for financial and other firms, believes the two groups are responsible for more than 60 percent of all thefts. The two groups’ thefts average $90 million per hack, Chainalysis reports.

The biggest single hack of all time was the 2014 theft of more than 850,000 bitcoins, then valued at some $450 million.

The two hacking collectives, referred to as Alpha and Beta, have very different structures, the company believes.

Group Alpha is “a giant, tightly controlled organization at least partly driven by non-monetary goals. By contrast the second hacking organization, group Beta, seems to be a less organized and smaller organization absolutely focused on the money. They don’t appear to care very much about evading detection,” said Chainalysis .

The groups both tend to wait at least 40 days to begin selling their illicit coins, but then move at least half of their haul in less than four month, Chainalysis main.

A key to successfully fighting these criminals is for exchanges to work together, Chainalysis said, adding that software investigation tools like its own Reactor can also help exchanges identify stolen cryptocurrency being offered for sale.

On Jan. 28, the Korea Herald reported that South Korea’s four main cryptocurrency exchanges—Bithumb, Upbit, Corbit, and Coinone—have “established a hotline to share information on a real-time basis on any unusual trading or transactions that are suspected to involve criminal acts, such as voice phishing and pyramid schemes.”

“Given the potential rewards, there’s no question hacking will continue; it is the most lucrative of all crypto crimes,” the Chainalysis report noted.

Leo Jakobson, Modern Consensus senior editor, is a New York-based journalist who has traveled the world writing about meeting and incentive travel, as well as the consumer and employee loyalty business. He also covered the East Coast side of the Internet boom and bust, small businesses, and New York City crime, nightlife, and politics. Disclosure: Jakobson owns no cryptocurrencies.

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