Bitcoin Core Developer Loses $3.5M Bitcoin in Hack Exploit

On January 1st, seasoned Bitcoin core developer, Luke Dashjr, revealed on Twitter that his PGP key was compromised in a hack that resulted in the loss of a significant amount of BTC. Dashjr added that he was unaware of how this happened. CZ claims that the developer lost more than 200 BTC, or almost $3.5 million at today’s exchange rates.

The hacker utilized CoinJoin, a technique that improves privacy by anonymizing Bitcoin transactions to disguise the transfer of cash, according to the developer’s thread on the entire incident. Dashjr attempted to notify the FBI after learning about the incident.

When asked how the attackers got access to his PGP (Pretty Good Privacy) key, Dashjr stated he had “no idea.” A PGP key is an encryption program that offers cryptographic privacy and authentication.

A little more than a month ago, the developer disclosed that his server had been hacked by an unidentified individual, and he also confirmed the presence of new malware and backdoors on the system. After doing more research, Dashjr discovered that the malware wasn’t just any old trojan; it was made expressly to infiltrate his server.

Reactions from the Crypto Community

A few people in the community immediately identified a possible link between the incident before the attack and this.

CZ, the CEO of Binance, expressed his support for Dashjr and pledged to take the appropriate steps while keeping an eye on the flow of the relevant monies.

“Sorry to see you lose so much. Informed our security team to monitor. If it comes our way, we will freeze it. If there is anything else we can help with, please let us know. We deal with these often, and have Law Enforcement (LE) relationships worldwide.”

This situation highlights the importance of cold storage despite being an affluent techie. Self-custody has already become a red-button issue, especially after the FTX collapse.

But several theories have been put forward by the community. And, not many are sold into the revelations made by Dashjr. While some were curious as to how a lapse of this magnitude could have happened, others speculated a potential case of “boating accident,” a way of tax evasion by claiming loss of assets. A few believe that the Twitter account itself was hacked.