Business & Finance

Crypto Fraud: Brothers Put Behind Bars for the 2016 Exchange Hack

Two Israeli brothers, who were involved in a huge circle of phishing schemes and illegally portraying exchanges to gather a huge sum of money, were recently caught by Israeli police officials. After arresting them, it was reported that the brothers were also linked to the 2016 Bitfinex hacking incident.

Phishing is an attempt to disguise one’s self as a trustworthy platform, like an exchange, to gather sensitive information about a certain user, such as private keys and passwords. The brothers primarily used these techniques to strip people away from their money.

With the bull market booming, the news of cybercrimes related to crypto has also started pouring in. As a result, the agencies responsible for catching cybercriminals have also geared up and have started taking swift actions. Two brothers, Eli Gigi and Assaf Gigi from Israel, were apprehended by the cyber unit of the Israeli police.

READ ALSO: Crypto Exchange Hack: Russian Link Found in Email Viruses

Brothers allegedly stole bitcoins and other cryptocurrencies from people by falsely portraying their planted links as exchanges through ads on different websites. By mimicking the popular exchanges and wallets, they posted their links in Telegram groups, according to reports. Whenever people tried to log in, the brothers would use their credentials to log into their accounts and transfer their fortunes into their own accounts.

The report further states that the brothers used these illicit schemes to gather over tens of millions of dollars into their accounts. The report states that these brothers were allegedly involved in the Bitfinex hack back in 2016 but the police officials refuse to talk about it as the investigation is still ongoing. Working with the police cyber units of several countries, an operation to find the accomplices is also being carried out mainly to retrieve the stolen funds during the Bitfinex hack.

READ ALSO: Korean War Turned Crypto: North Blamed for Crypto Exchange Hack

According to a local news source, the police raided the homes of these brothers and found a crypto wallet which had a significantly lower amount than the total alleged sum stolen by the brothers. It was also brought to light that Eli Gigi, the elder brother “is a graduate of an elite technological unit of the IDF that recruits youth who demonstrate outstanding academic capabilities”. Apart from this, the police also found luxury cars belonging to the brothers.

The Bitfinex incident was a prominent incident in crypto hacking history, where they lost almost $65 million at that time. According to the report, they lost around 119,756 BTCs which would make over a billion at today’s value.

Apart from this incident, there have been multiple other unfortunate events where exchanges have been breached and hacks have deeply hurt the finances of multiple crypto firms. For example, recently, a reported malware has been mimicking a Turkish exchange BtcTurk.

READ ALSO: Even Bitcoin Creator Has Less Bitcoins Than Hackers

The cybersecurity company ESET reported that an Android malware was being circulated that sidesteps Google’s SMS permissions in order to acquire the two-factor authentication (2FA) codes received through SMS. They also laid some instructions for an individual to save himself from such hackings.

  • Only trust cryptocurrency-related and other finance apps if they are linked from the official website of the service
  • Whenever possible, use software-based or hardware token one-time password (OTP) generators instead of SMS or email
  • Only use apps you consider trustworthy, and even then: only allow notification access to those that have a legitimate reason for requesting it

READ ALSO: Crypto Phishing Alert – Malwares Acting as Turkish Crypto Exchange

It’s not only the exchanges as even governments are facing the same issues. Ransomware has entered the crypto space where hackers demand ransom in cryptos. Recently, Rivera Beach’s governing bodies were left helpless against hackers who froze the computers of the officials which contained sensitive information. In order to regain access to the computers, the hackers demanded ransom in BTC.

The world is advancing in the field of crypto and blockchain, and with new startups forming every day in this domain, it is impossible to stay away from this globalized currency concept. So, the only way to stay safe is to be cautious. The Section Chief of the FBI’s Financial Crimes Section within the Criminal Investigative Division, Steven M. D’Antuono warned bitcoin and crypto investors to be cautious before investing in a new project. :

“While the FBI and other law enforcement and regulatory agencies are actively trying to eliminate the scams and bring the scammers to justice, there seems to be a lucrative market for the scammers, meaning they continue to appear. Perhaps our best tool in mitigating fraudulent offerings is getting information out to the public that they need to be careful prior to investing in these projects.”

READ ALSO: $41.5 Million Bitcoin Hack: What We’ve Learned So Far


Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

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