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IOTA Wallets Emptied; $4 Million Stolen

posted by janrinok on Thursday February 01 2018, @02:37AM   
from the handy-piece-of-code dept.

bradley13 writes:

My old physics teacher always said: "It's the dumb criminals who get caught; you never catch the smart ones." He was a really smart guy, and he did live a nice lifestyle, hmmm...

Anyway, so IOTA. As with any digital currency, you need some random information - a passphrase typically - that is used when you create your wallet. In the case of IOTA, which is supposed to be IOT friendly, this means a string of 81 random characters, the generation of which could be pretty easily automated.

That's great, and the OSS world being full of helpful people, someone wrote a handy generator, put the code for all to see on GitHub, and put their generator onto a website where you could easily make use of it. Nice.

Actually, diabolical. The code on the website really was identical to the code on GitHub, except for one tiny, almost insignificant change: at some point, the owner swapped out the random seed to a value that he knew. Not even constant - that would have been too obvious - but known nonetheless.

And for many months, many people used his friendly little service. Until January 19th, when he emptied their IOTA wallets, erased his presence from the Interwebs, and quietly disappeared. $4 million or so richer.

This one won't be caught.

tl;dr for anyone who doesn't get it: The point of having a secret password, secret passphrase, or secret key is that it's secret. Which means that you don't have it generated for you by a public web service.

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Original Submission

• And the problem is? And the problem is? (Score: 3, Insightful) by jmorris on Thursday February 01 2018, @03:29AM (1 child)

  by jmorris (4844) on Thursday February 01 2018, @03:29AM (#631323)

  And here we see the wisdom in "it is immoral to let a sucker keep his money."

  These fools have learned a valuable lesson in the only way most of them are capable of learning, by pain. And while the losers think they lost something valuable, it was just play money they lost so it is all good.

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• Re:And the problem is? (Score: 3, Insightful) by maxwell demon on Thursday February 01 2018, @06:27AM

  by maxwell demon (1608) on Thursday February 01 2018, @06:27AM (#631361) Journal

  And while the losers think they lost something valuable, it was just play money they lost so it is all good.

  As long as others are willing to pay for it, it is valuable. If you find someone willing to buy your excrement for its weight in gold, then your shit is literally worth gold, and anyone stealing some of it does actually cause you a real loss.

  --
  The Tao of math: The numbers you can count are not the real numbers.

  Parent