Bitcoin Developers Loses Staggering $3.3M in PGP Exploit

UTC by Bhushan Akolkar · 3 min read
Bitcoin Developers Loses Staggering $3.3M in PGP Exploit
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The PGP keys were reportedly compromised for the hacker to gain access to more than 200 Bitcoins lying in the developers wallet.

In the latest development of a crypto wallet hack, Bitcoin developer Luke Dashjr lost a staggering $3.3 million due to a Pretty Good Privacy (PGP) key compromise. Last week on December 31, Dashjr’s wallet had several outgoing transactions totaling over 200 Bitcoins and an estimated $3.3 million as of the current BTC price.

In a message on Twitter this Sunday, January 1, Luke Dashjr wrote:

“PSA: My PGP key is compromised, and at least many of my bitcoins stolen. I have no idea how. Help please. Looks like some of it is coinjoined to 1YAR6opJCfDjBNdn5bV8b5Mcu84tv92fa”.

In a message later on Monday, the Bitcoin developer stated that it was “basically all gone”. The funds of the Bitcoin developer were lost due to the PGP or Pretty Good Privacy which is a cryptographic method to encrypt or decrypt data. This method can be used to encrypt information that is stored on the server. PGP helps to protect against unauthorized access or tampering. Keys generated through PGP can be useful to verify a specific piece of data like the legitimacy of a software download.

However, it isn’t clear yet what exactly led to the exploit. Many in the crypto community feel that the hacker may have gotten access to the server used by Dashjr in order to steal data. This also includes the private key to access his Bitcoin wallet. Back in November 2022, Dashjr acknowledged that his server was compromised.

Crypto Community Weighs In

The crypto community has weighed in on the recent incident indicating what might have led to a possible hack. Gustavo Gonzalez, solutions developer at OpenZeppelin noted:

“The hack is still pretty fresh, so there is still not much clarity on what might have happened, besides PGP keys compromised and speculation that private keys might have been stolen from a previous server hack”.

Banteg, the pseudonymous developer of Yearn Finance commented on Dashjr’s post stating that it might be a potential “supply chain attack”. Such attacks usually take place when a hacker enters and modifies software by injecting malicious code into the system.

The incident has got many eyeballs. Binance chief Changpeng Zhao stated that his team is monitoring the assets and that they would freeze them if sent to a centralized exchange.

The last year of 2022 witnessed several cryptocurrency hacks taking place in the market. Several billions of dollars worth of investors’ money were lost last year. The decentralized finance (DeFi) market was the most affected.

Bitcoin News, Blockchain News, Cryptocurrency news, Cybersecurity News, News
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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