Bitcoin Core Developer Raises Alarm Over Self Custody Wallets After Losing BTC to a Hack

Dashjr disclosed wallet addresses where the stolen bitcoins were sent, with 216.93 BTC sent in four transactions on Dec. 31.

Human with aqua suit standing on a platform bitcoin holding red burning alarm lights
  • The Bitcoin Core developer Luke Dashjr lost all his BTC in a hack. 
  • Dashjr revealed the wallet addresses where the stolen bitcoins were sent. 
  • Changpeng Zhao (CZ), the CEO of Binance, has offered to assist the developer in reclaiming the stolen bitcoins. 
  • Earlier, CZ warned cryptocurrency enthusiasts to be careful with self-custody wallets.

Bitcoin Core developer Luke Dashjr said he lost all of his BTC to a hack. Hackers gained access to the developer’s PGP key in some way that is unclear to him.

Pretty Good Privacy key, or PGP, is a well-known security mechanism that employs two keys to protect access to encrypted information.

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While responding to messages from concerned crypto community members on Twitter, Dashjr said he noticed some suspicious movement. According to him, Coinbase and Kraken sent him emails about login attempts. 

Dashjr revealed some wallet addresses where the stolen bitcoins were sent. The address received 216.93 BTC in four transactions within 16 minutes on the last day of 2022. In addition, the developer stated that law enforcement agencies have failed to track the hacker despite receiving his complaints.

Call for Caution With Self-Custody Wallets

So far, Dashjr has received mixed responses about the theft. Some cited that negligence on his part could have led to the attack. However, the CEO of Binance, Changpeng Zhao (CZ), has volunteered to assist him in reclaiming the stolen BTC. 

In replying to Dashjr’s tweet, the CEO said he had informed the security team of Binance, and they won’t hesitate to freeze the stolen BTC if the hacker transfers them to the cryptocurrency exchange. 

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CZ recalled how Binance has dealt with stolen crypto assets in the past due to its connection with law enforcement agencies globally. He also urged Dashjr to inform him if he needed help regarding the missing BTC.

CZ warned cryptocurrency enthusiasts to be careful with their self-custody wallets as they pose their own risk too. Some Twitter users backed the Binance boss’s claims, stating that self-custody wallets require a high degree of diligence and security.

On the Flipside

  • Although no encryption method is 100% secure, PGP keys are considered extremely safe and were even used by Edward Snowden. As a result, it raises questions about what led to the compromise of the developer’s PGP keys. 
  • Dashjr used PGP to verify that Bitcoin Knots or Core downloads were malware-free. In the meantime, he warned the community not to trust bitcoin knots.

Why You Should Care

In the aftermath of the FTX crisis, the self-custody of crypto assets gained traction as large amounts of funds were moved from centralized to self-custody wallets. However, the recent hack in the wallet of an experienced developer demonstrates that assets are not even safe in self-custody wallets.

 

Explore more stories on cryptocurrency hacks:

More Than $3B in Crypto Was Stolen in Hacks This Year

Elon Musk Imposter Hacks UK Cabinet Minister’s Account, Promotes Crypto Scam

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Soumen Datta

Soumen has been a dedicated researcher and writer in the field of cryptocurrencies for the last few years. Even though Indian crypto regulations are still unclear, he believes that India will continue to innovate in the years to come. He loves to play his guitar and sing along in his spare time. He holds bags mostly in BTC, ETH, BNB, MATIC, ADA.