Bitcoin’s Luke Dashjr, one of the core developers behind the cryptocurrency, did not start the new year of 2023 on a bright note. His crypto wallet was struck by a hack attack, leading to the loss of 216.93 BTC from his personal holdings. At the time of writing, BTC’s price stood at $16,570 (roughly Rs. 13.7 lakh). This means, Dashjr is estimated to have lost $3.6 million (roughly Rs. 30 crore) in the cyber-attack. The notorious actor(s) claimed access to the privacy key to Dashjr’s crypto wallet and drained off the big chunk of his total BTC holding.
The hackers exploited Dashjr’s Pretty Good Privacy (PGP) key — that would have allowed the hacker(s) to infiltrate two private keys to execute the fund drain.
“Help please,” tweeted Dashjr, as he shared details about the incident. Evidently disappointed, he later tweeted, “it’s basically all gone”. The software mogul also shared a wallet address, where the stolen Bitcoin were supposedly redirected to.
PSA: My server was accessed this morning by an unknown person. Full analysis in progress, but take extra care that you PGP-verified any downloads. #Bitcoin
— @LukeDashjr@BitcoinHackers.org on Mastodon (@LukeDashjr) November 17, 2022
As of now, the exact details on how the hack was executed remain unclear. His Twitter followers, however, suspect that a post from him on November 17 may have exposed his server vulnerabilities to the hacker(s), who took advantage and slashed the wallet to their favour.
Completed first round of analysis.
Evidence suggests the attacker installed 2-3 remote shell backdoors, but didn’t touch anything else.Moving forward with an even more extreme check, but given what I’ve seen so far, I don’t expect it to turn up anything more.
— @LukeDashjr@BitcoinHackers.org on Mastodon (@LukeDashjr) November 17, 2022
Changpeng Zhao, the CEO of Binance crypto exchange expressed ‘sadness’ at the incident while hinting that Dashjr held his BTC in a self-custody wallet.
“Self custody have a different set of risks,” Zhao tweeted.
Sad to see even an OG #Bitcoin Core Developer lost 200+ BTC ($3.5 million). Self custody have a different set of risks.
We will try to monitor and see where we can help. :pray: https://t.co/9eGZ7AFgC2
— CZ :large_orange_diamond: Binance (@cz_binance) January 1, 2023
With self-custodial wallets, users are not reliant on any crypto exchange or wallet provider to save their private keys in their own systems.
The buzz around self-custody of crypto assets garnered attention after the users of FTX crypto exchange lost over a billion dollars after the platform suffered a liquidity crunch and collapsed.
In fact, owing to back-to-back hack attacks on crypto exchanges, around 550,000 Bitcoin worth $9.2 billion (roughly Rs. 76,760 crore) left the reserves of crypto exchanges in 2022 into self-custody wallets.
Zhao was one of the first mainstream crypto industry leaders to have reinstated the importance of self-custody of crypto assets following the downfall of FTX.
In November, Zhao had recommended members of the crypto community to start keeping custody of small amount of assets to understand how self-custodial tools and technologies work.
For now, details about Dashjr’s stolen funds remain unknown. An investigation may have been launched in the case.
As per Dashjr’s LinkedIn details, he has been a core developer for Bitcoin since 2011 and claims to have a programming experience of over 23 years.
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