Bitmain Sues Hacker For 617 Bitcoin Stolen To Manipulate Decentraland Market On Binance
Leading ASIC manufacturer and the leading Bitcoin mining company Bitmain wants the mysterious hacker who hit its Binance account in April to return stolen property and pay for damages.
Bitmain filed a lawsuit in the U.S to help get the hacker. As per the documents, the Bitcoin mining giant’s lawsuit filed at the US District Court for the Western District of Washington on November 7 relates to an April 2018 infiltration that cost the company over 600 bitcoins.
Not your typical hack
Unlike a typical account compromise, the hacker did not simply infiltrate Bitmain’s account and empty it. Based on our analysis of the situation, this is likely due to the fact that Bitmain had equipped its account with two-fact authentification.
What this means was that in order to successfully withdraw the funds from Bitmain’s Binance account, the hacker(s) would have needed to bypass the 2FA. As such, the hacker had to get creative and so they did.
Pumping Decentraland (MANA) with Bitmain’s Bitcoin
After a period of accumulating MANA tokens, the hacker used Bitmain’s Bitcoins to create a massive pump on the MANA market. Subsequently, the hacker dumped the MANA they had accumulated at the inflated price.
What they did was to engage in what is called a ‘wash trade’- the hacker used the mining company’s compromised account to inflate the prices of Decentraland’s MANA token.
Following the price manipulation, MANA saw its price spike almost three times more within an hour. On leading crypto exchange Binance, the price of the token jumped from around $0.12 to hit a high of nearly $0.356.
Similar trends were observed in the coin’s global performance, with the small cap token rising by over 40 percent, significantly increasing Decentraland’s market valuation.
The hacker’s intention was achieved as he was able to buy MANA at deflated prices prior to the hack and proceeded to sell them at a huge premium using Bitmain’s Bitcoin. The assumption is that the attacker could have accessed the services of top exchanges to liquidate his funds.
Bitmain also adds that after engaging in the unauthorized trading, the hacker used Binance and Bittrex to complete the wash trades that involved 2.29 million MANA tokens.
Per information from the Chinese-based company, the hacker transferred his Bitcoin loot to Bittrex. In total, Bitmain says it lost 617 bitcoins which were valued at about $5.5 million at the time of the attack.
Bitmain’s case against “John Doe,” the pseudonym given to a yet-to-be-identified individual, may appear now that the hacker’s identity is unknown.
However, legal experts have explained that it is not entirely impossible to find information on the hacker given their use of centralized platforms.
Although the hacker may have succeeded in concealing their identity, for now, Bitmain may use the lawsuit to subpoena both Bittrex and Binance into divulging all the information in their possession that can lead to the unmasking of the hacker.
Bitmain’s filing asks that a jury handles the case and that it be determined in its favor with the defendant (John Doe), being made to pay for damages.