On April 30, Portal Do Bitcoin published an exclusive story in which they uncovered a failed online Bank Heist that would have netted the hackers around 30 million Brazilian Real, which is around $5 million.
How the Heist Went Down
According to the report, bank robbers hacked into the account of Gerdau, a major steel manufacturer, at Santander Bank on April 20. During the heist, they made away with $5 million worth of Brazilian Real. The robbers then attempted to use the money to purchase Bitcoin at Brazilian crypto exchanges. However, the local exchanges in the country managed to stop the transactions before any purchases had been finalized.
Gerdau first notified Santander Bank of an issue with their account on April 16. Internal investigations revealed financial irregularities, which were later traced to an attack on the steel maker’s account. Shortly after, 11 Electronic Fund Transfers were initiated with the funds being sent for the account of four companies located in Rio Grande do Sul, Sao Paulo, and Rondonia. Santander was actively monitoring how the funds were being moved around until they landed in Brazilian OTC crypto trading desks.
A Complex Hacking Operation
According to the report, the hack was quite complex. It states that the robbers did not make the transfers using a Gerdau account login. The debit was made via Mundial Illumination, an account holder at Santander Bank, which is located in Porto Alegre.
Using the internet banking system of Mundial, the scammers programmed and carried out trades on ETFs. Once the operation was over, they manipulated the system’s internal channel coding to move the funds. However, the funds did not come from Mundial’s account. Instead, it came from Gerdau’s account.
The investigators found that all the transactions were made using the same IP address. They also discovered that the scammers had been programmed their plan into the system six days before it was executed. According to the report, Santander had blocked a transaction by Mundial Illumination six days before the hack since it exceeded normal transaction limits. However, a bank manager got in touch with Santander and requested that the limit be lifted. AS a result, high-value transactions could now be executed.
Attempted Purchase of BTC
The report notes that the robbers attempted to purchase BTC from OTC traders. OTC traders typically buy and sell huge amounts of BTC in Brazil’s crypto market. Investigations carried out by Portal do Bitcoin found that the hackers tried to purchase $5 million in BTC. The attempt triggered numerous blockages wherever the money was sent.
When an exchange received a fraction of the stolen funds, they would swiftly block the money. The report could not ascertain how much BTC the hackers managed to receive. Figures range from $0.6 million to $2.5 million. According to one owner of an OTC, who wished to remain anonymous, they blocked a transaction for $0.9 million after they realized the money they received entered the original account on the same day.
OTC Crypto Brokers
Over the counter brokers typically deal with investors who don’t want to transact their trades on an open exchange. Over the counter brokers are usually affiliated with a particular cryptocurrency exchange, but tend to operate within a separate division. Typically speaking, investors will use these OTC brokers if they are dealing with large amounts of crypto that they want to transact at negotiated prices. According to a report by Chainalysis, most money laundering in crypto is being facilitated by OTC brokers. The reason for this is because KYC ( know your customer ) protocol is more conservative on the OTC side compared to the actual exchange side.
What the story reveals is that with better coordination between the fiat world and crypto world, it is possible to stop hackers trying to use the crypto world to hide their ill-gotten wealth. In the coming weeks, more details of the heist might emerge. As the world of cryptocurrency and blockchain continues to evolve, many believe that law enforcement will eventually prefer criminal activity with digital assets. Many continue to argue that it’s easier to track down Bitcoin criminals opposed to criminals that are strictly using cash. As we can see from the report above, companies like Chainalysis have resources that we never knew were possible. Long term, creating a safer environment in crypto might be the ultimate driver of mass adoption.
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