Bitmain Files Lawsuit Against Hacker Who Allegedly Stole $5.5 Million From Its Binance Account

  • Bitmain has recently filed a "John Doe" lawsuit against a hacker who alleged broke into its Binance account.
  • Using the firm's funds, the hacker manipulated the price of MANA to be able to cash out.

Cryptocurrency mining hardware manufacturer Bitmain, which has been eyeing an initial public offering (IPO), has filed a “John Doe” lawsuit against a hacker that allegedly stole cryptocurrency worth $5.5 million from its account on crypto exchange Binance.

According to the lawsuit, filed with the US District Court for the Western District of Washington, the theft occurred in April and saw the hacker manipulate the price of Decentraland (MANA) to get the funds.

The document claims that the hacker managed to take over Bitmain’s account. Instead of immediately trying to withdraw the funds - which could’ve triggered Binance’s security systems – the hacker used two other accounts on Binance and one on Bittrex to pull off the heist.

It notes the hacker acquired roughly 2.3 million MANA tokens on Bittrex, which were then used to inflate the cryptocurrency’s price on Binance. Using Bitmain’s “approximately 617 BTC” and other cryptocurrencies, the hacker set buy orders he got filled with the MANA he owned.

Per CryptoCompare data, this saw the price of MANA artificially shoot up to about 0.00003 BTC, before dropping to less than 0.00002 BTC per token in April. Curiously, a similar price jump also occurred in July, although it’s currently unclear whether it’s related to Bitmain’s incident.

MANA's price pumped in April, likely because of the hack

Some of Bitmain’s BTC was reportedly used to buy ETH, which was then used to buy MANA as well. The hacker, per the lawsuit, then still traded his BTC for MANA using Bitmain’s account, presumably to avoid looking suspicious. He then managed to withdraw his funds “into a digital wallet on the Bittrex cryptocurrency trading platform.”

According to some experts, Bitmain’s lawsuit may force Binance and/or Bittrex to reveal the hacker’s identity, as both exchanges enforce know-your-customer (KYC) checks and are likely able to find out who’s responsible for the incident.

The lawsuit was filed at a time in which Bitmain is looking to deploy 90,000 Antimer S9 ASICs ahead of the November 15 bitcoin cash (BCH) hard fork. Curiously, the incident came to light as Decentraland’s popularity started picking up, after someone spent 2.7 million mana tokens to acquire virtual land.

As CryptoGlobe covered, cryptocurrency exchange theft hit nearly $1 billion in the first nine months of this year, according to a report published by US-based cybersecurity firm CipherTrace. Recently, cybercriminals also tried to compromise the Gate.io exchange to steal funds.

Bitcoin Investors Reportedly Lose Millions in South African Exit Scam

Michael LaVere
  • VaultAge Solutions CEO Willie Breedt is being accused of making off with millions in investor bitcoin.
  • Breedt allegedly fled the country for Mozambique and has not communicated with investors since December 2019. 

South African cryptocurrency investors are accusing the CEO of VaultAge Solutions of stealing millions in crypto before going on the run. 

According to a report by AllAfrica, Willie Breedt, the CEO of cryptocurrency investment firm VaultAge Solutions, is presumed to be on the run after not making public communications since December 2019. The report claims Breedt was speculated to be staying near the town of Jeffrey’s Bay and that his whereabouts where being looked into by the country’s criminal investigation unit. 

However, South Africans who invested cryptocurrency with the now-defunct firm fear the CEO may have fled the country for Mozambique. 

Breedt is accused of stealing millions from bitcoin investors. The report claims VaultAge Solutions is not registered as a legitimate financial institution with the Financial Services Conduct Authority (FSCA), despite having more than 2000 investors. 

The report quoted investor Lettie Engelbrecht from Krugersdrop, 

We are pensioners and invested R200 000. From December until April, we received payments on the growth of our investment. Since then, we never got any money. We are desperate and living on a shoestring budget.

One South African investor reportedly had deposited more than R6 million ($342,000) with Breedt’s company. 

Breedt delivered a written reply to local outlet News24, explaining, 

I am busy attending to the commitments I have made to members. The commitment is to have all the initial capital paid back by 31 May.

Colonel Katlego Mogale of the Directorate for Priority Crime Investigation (DPCI) said authorities are investigating the case but cannot reveal any more information “at this stage.”

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