2 Israeli Brothers caught for Bitfinex Hack: Report

The cryptocurrency space is notoriously known for its high-profile exchange hacks, heists, and high-tech sim-swapping cases that are reported frequently in different regions across the World. The lack of uniform regulation across all countries implies that this fledgling space is still very susceptible to hacks and malware attacks. Furthermore, the fact that cryptocurrencies and their underlying blockchain technology make their transactions virtually untraceable imply that apprehending such culprits and recovering the stolen amounts are almost always impossible.

Arrested in Israel

2 Israeli brothers were arrested by the cyber unit of the Israeli Police a few days ago in Jerusalem for an alleged phishing scheme. There were conflicting reports on the actual sums of money stolen by the pair. Israeli news outlet Ynet reported that they managed to steal $100 million while the Finance Magnates outlet reported that it was much lower at around “tens of millions of dollars”. Also, connections between the brothers and the 2016 Bitfinex hack has been supposedly established by Israeli authorities. The 2016 incident led to the loss of around $65 million in bitcoin.

How was the Scam executed?

Posta, an Israeli news website mentioned that the pair accessed the crypto wallets through a simple phishing scheme. Eli Gigi and his younger brother Assaf Gigi accessed trader’s wallets by posting in groups on Telegram, the secure messaging app, with links to what seemed to look like cryptocurrency trading sites. Unsuspecting traders would then click on these links and submit their private keys. Once the private keys were uploaded, the brothers swooped in and used this information to transfer the cryptocurrencies into their own personal wallets which were completely untraceable.

While this specific hacking method has come to light in this case, the investigators for this heist are also considering other suspected methods that the hackers could have used to steal and move the stolen funds. One of the brothers, Eli, supposedly has highly technical skills and was a former recruit to an Israeli Defense Forces unit specializing in youth with high academic results.

The Bitfinex Hack

The cryptocurrency exchange, Bitfinex, faced a huge hack in 2016 where 119,756 bitcoins were lost and never fully recovered. This was the largest exchange hack then since the Mt. Gox hacks. Furthermore, Bitfinex faced more issues over the next few years and was in the limelight for different reasons.

It was linked to the stablecoin Tether when they allegedly covered up the loss of $850 million in client funds according to a New York Supreme Court judge who also ordered its shutdown. A company called Crypto Capital Corp apparently received $850 million from Bitfinex but Bitfinex did not receive the sum back. It has since been alleged that Bitfinex used Tether to hide this loss.

As of now, the police spokesperson mentioned that the investigation has been going on since early 2017 and only time will tell if there are any further updates to be revealed in this unique case.
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