The UK police’s Eastern Region Special Operations Unit (ERSOU), auctioned off more than $294,000 of seized cryptocurrency. They confiscated the stolen cryptocurrency from a 19-year-old teenage hacker.
Reportedly, this was the ERSOU’s first auction of such kind where they collaborated with Wilsons Auctions to auction off the confiscated digital assets. Though, it is not the first time for auction house; in March 2019, Wilsons Auctions had managed a public auction of bitcoins on behalf of the Belgian Government.
The auctioned assets included Ripple, Bitcoin, and Ethereum among many other cryptocurrencies. Martin Peters, the detective chief inspector, and head of ERSOU Cyber & Economic Directorate stated: “Asset recovery in a digital world has evolved, so it’s really important that working alongside commercial partners, we have a clear process for the storage and sale of cryptocurrency.”
The department also hired a contractor for asset management and realization to “ensure that the assets are not able to make their way back into crime,” via the auction.The auction house sold 15 lots of bitcoins to bidders in person and online with no-minimum reserve. The sale lasted for 24 hours and was held in two slots.
The teen and mastermind of the cryptocurrency theft, Elliott Gunton from Norwich, UK, was previously charged with hacking in 2015. Gunton was 16 when he hacked one of the telecommunications giants, TalkTalk. He was sentenced for 20 months of imprisonment and was ordered to pay a penalty of more than £400,000.
A routine check of the convicted teen’s computer (a part of his sentence of 2015-hacking) revealed that he had bundles of stolen personal information of numerous EtherDelta customers which he had put in an advertisement for the online sale of $3,000. The ad also stated that the mode of payment should be crypto only.
His computer’s contents also revealed his partner in the crime, a U.S. national, Anthony Nashatka. Together, they had hacked the decentralized trading platform and had withdrawn cryptocurrency from hundreds of EtherDelta user’s accounts under the pseudonyms, Planet and Psycho.
Initially, their illicit holdings were valued at around $337,000. The operation was ongoing for seven days in December 2017 and involved several rounds.
As per reports, on Dec. 13, 2017, Nashatka purchased ID information concerning an unnamed person, “Z.C.,” considered to be Zachary Coburn, the CEO of EtherDelta. Following that Gunton and Nashatka transferred Z.C.’s cellphone and email addresses to accounts under their control.
Using the seized information, Nashatka and Gunton gained access to EtherDelta’s Cloudflare account, took down the EtherDelta website and brought up a proxy site. So, whenever an EtherDelta client logged in, their wallets, accounts, and private keys, their account information became accessible to the two hackers.
Investigation revealed that one of the victims had lost around $800,000, but the full list of victims has not yet been disclosed.
Both the hackers have been charged. Gunton was arrested, but released as he had already served time while on remand; he still has to serve the three-year community order. He has also admitted hacking, and controlling the Instagram account of Australian telecoms giant Telstra which had over 1.3m followers. Nashatka, for his part in the plot, faces a prison sentence of at least 20 years and a fine of up to $250,000. His federal court appearance is on October 10 in San Francisco.
Gunton’s parents, Carlie Gunton and Jason Gunton, has also been charged with attempts to transfer cryptocurrencies out of a confiscated bitcoin wallet. They admitted their crime and pleaded guilty at the Norwich Crown Court.
Devoid of the arrests, the total number of victims and the actual amount of stolen funds is still unknown.