An Investigator’s Guide to Blockchain, Bitcoin and Wallet Transactions
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The document provides an investigator’s guide to blockchain, bitcoin, and wallet transactions, detailing how blockchain operates as a secure public ledger and how bitcoin functions as a decentralized currency. It highlights the risks associated with cryptocurrency, including various scams such as fraudulent initial coin offerings (ICOs), shady exchanges, and pyramid schemes, as well as notable hacks and thefts in the crypto space. Additionally, it discusses the importance of using trustworthy sources and forensic tools to mitigate risks and ensure safe transactions.
![MYBTGWALLET
Nov 16, 2017, 10:37 AM
to me
Hi Sheldon,
The website is called mybtgwallet and was officially endorsed by BTG team both on their website and via
twitter.
They took my BTC and ETH in the following fraudulent transactions, but seemed to have left LTC [which I
promptly removed from my wallet]:
-0.22545683 Bitcoin
https://live.blockcypher.com/btc/tx/0cf2fc7495b437e225d612076628a0c4778e693428f1618e775e98e9349
2b1a5/
-0.23755015 Bitcoin
https://live.blockcypher.com/btc/tx/9c2f96a9ba55d534999df089ef1c8317f284584594a37e2effe06d7e2893
2501/
-12.30182882 Ethereum
https://etherscan.io/tx/0xf98d4a048c0e5833b548ec44753622963d903f155b74b4943fd9c64afb95c3a3
It's affected over 100 people. Hopefully your guy can catch these bastards.](https://image.slidesharecdn.com/dmgblockchaini-sight-181102185426/85/An-Investigator-s-Guide-to-Blockchain-Bitcoin-and-Wallet-Transactions-33-320.jpg)
![Let's investigate this transaction
on Blockseer...
Nov 16, 2017, 10:37 AM
to me
Hi Sheldon,
The website is called mybtgwallet and was officially endorsed by BTG team both on their website and via
twitter.
They took my BTC and ETH in the following fraudulent transactions, but seemed to have left LTC [which I
promptly removed from my wallet]:
-0.22545683 Bitcoin
https://live.blockcypher.com/btc/tx/0cf2fc7495b437e225d612076628a0c4778e693428f1618e775e98e9349
2b1a5/
-0.23755015 Bitcoin
https://live.blockcypher.com/btc/tx/9c2f96a9ba55d534999df089ef1c8317f284584594a37e2effe06d7e2893
2501/
-12.30182882 Ethereum
https://etherscan.io/tx/0xf98d4a048c0e5833b548ec44753622963d903f155b74b4943fd9c64afb95c3a3
It's affected over 100 people. Hopefully your guy can catch these bastards.](https://image.slidesharecdn.com/dmgblockchaini-sight-181102185426/85/An-Investigator-s-Guide-to-Blockchain-Bitcoin-and-Wallet-Transactions-55-320.jpg)
An Investigator’s Guide to Blockchain, Bitcoin and Wallet Transactions
- 1. An Investigator’s Guide to Blockchain, Bitcoin and Wallet Transactions Simon Padgett, Sheldon Bennett, Timothy Eller, DMG Blockchain
- 2. Sheldon Bennet, Chief Operating Officer, Director, DMG Blockchain Simon Padgett, Forensics, DMG Blockchain Timothy Eller, Data Science, DMG Blockchain
- 3. Contents • What is the blockchain? • What is Bitcoin? • How does Bitcoin work/move? • New Tech / New Problems - a whole lot of criminal opportunity • Forensics
- 4. What is the blockchain? Some kind of database?
- 5. What is the Blockchain ? “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016)
- 6. How Does Blockchain Work? Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain. Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet. https://dmgblockchain.com/videos/
- 9. What is Bitcoin? The first mass use of blockchain
- 10. Bitcoin is…. • Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator. • It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009. • The system is peer-to-peer, and transactions take place between users directly, without an intermediary. • These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. • Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. • Newly minted Bitcoin go into a Wallet. From these wallets coins start to be distributed.
- 11. Now that we know what Bitcoin is Let’s recap what it has done since its beginning
- 12. Since Genesis 2017 CONFERENCE SLIDE
- 13. The Bitcoin Rollercoaster 2009 to 2018
- 14. Since Genesis 2017 CONFERENCE SLIDE
- 16. Movement How wallets and transactions work
- 17. Movement: How does this stuff move from place to place? Bob wants to pay Alice 4 Bitcoin so he creates a transaction and broadcasts it on the network Transaction AfterBefore From Amount To Amount Bob 4.0 Alice 4.0 Value transfer Bob Alice 5.0 2.0 Bob Alice 1.0 6.0
- 18. Movement: How does this stuff move from place to place? After User Example of Sending /Receiving a Bitcoin
- 19. Hard wallets
- 20. A whole lot of criminal opportunity New Tech - New Problems
- 21. Investment continues – Blockchain Venture Cap.
- 22. Cryptocurrency scams to be aware of But note: •A blockchain in itself is secure. •It is the external human influence that we have to watch.
- 23. 1. Fraudulent ICOs •Fabricate a fake ICO, create marketing hype and persuade people to buy. •Seen as a quick and innovative way to kickstart a company. •Ethereum has become the breeding ground for these fraudulent ICOs. •It is the ignorance of new investors who dream of huge gains in a matter of days by holding worthless ICO tokens. Cryptocurrency scams to be aware of
- 24. 1. Fraudulent ICOs Indicators of fraudulent ICOs or Token Sales: •Copied whitepaper •Anonymous team •Unusual hurry in execution •Mismatch of words •Ignoring hard questions •No strong reasons for the token issue •No roadmap •Unknown team (management, lawyers, bankers, etc.) •Jurisdictions that have little to no investor protection rights Cryptocurrency scams to be aware of
- 25. 1. Fraudulent ICOs Here are a few examples of fraudulent ICOs: •Confido disappeared with investor’s $375,000. •Benebit disappeared with investor’s $ 2.7 million. •Centra Token scammed $32 million Cryptocurrency scams to be aware of
- 26. 2. Shady Exchanges •The second most common form of scam that you will come across would be a ‘shady exchange’, sprung up overnight. Once you trust them and deposit your coins there, you have no way to get them back if the intentions are fraudulent. •Also, some exchanges that start well can also eventually run away with your money any time because they fail to scale and innovate to stay competitive in the market. •As well shady exchanges are targets for hackers as they generally have weak security due to little investment. Cryptocurrency scams to be aware of
- 27. 2. Shady Exchanges Some of these platforms as reported by Bitcoin.com are: 01crypto, Btc-cap, Capital-coins, Coinquick, Cryptavenir, Crypto-banque, Crypto-infos, Cryptos.solutions, Cryptos-currency, Ether-invest, Eurocryptopro, Finance-mag, Gme-crypto, Gmtcrypto, Good-crypto, Mycrypto24, Nettocrypto, Patrimoinecrypto, and Ydconsultant. Cryptocurrency scams to be aware of
- 28. BREAKING NEWS MapleChange Loses 913 Bitcoin ($6M) In “Hack,” Deletes Twitter Page And Shutters Website On Sunday morning, a lesser-known crypto exchange, revealed that it had apparently fallen victim to a hack, resulting in a loss of consumer-owned funds. The platform in question, MapleChange, which is reportedly Canadian (as its name implies), took to Twitter to explain that “due to a bug,” an unnamed group of individuals managed to withdraw funds, adding that it is conducting a “thorough investigation” and will be unable to make refunds.”
- 29. 3. Fake Wallets •With the launch of Bitcoin, many fake crypto wallet programs have also been launched. •That’s why it is a big NO-NO to pick any wallet randomly because there are chances that it will be fraudulent and you may end up losing your money. •Though these wallets may promise you control of your funds, never trust them without proper due-diligence. Cryptocurrency scams to be aware of
- 30. 4. Pyramid or Ponzi Schemes Cryptocurrency scams to be aware of
- 31. 4. Pyramid or Ponzi Schemes •This form of scam is easiest to spot but people still fall for it. •If you find a crypto project that actively encourages the recruitment of new investors to maximize your profits, it is probably a Ponzi scheme. This system works on the model of scamming the one who enters the system later. •Also, schemes that promise absurd returns are likely to be Ponzi schemes Cryptocurrency scams to be aware of
- 32. 4. Pyramid or Ponzi Schemes Does it promise regular returns that exceed average market returns? Chances are, it's a Ponzi Does it focus more on recruiting new people than any product? Chances are, it's a pyramid scheme Cryptocurrency scams to be aware of
- 33. MYBTGWALLET Nov 16, 2017, 10:37 AM to me Hi Sheldon, The website is called mybtgwallet and was officially endorsed by BTG team both on their website and via twitter. They took my BTC and ETH in the following fraudulent transactions, but seemed to have left LTC [which I promptly removed from my wallet]: -0.22545683 Bitcoin https://live.blockcypher.com/btc/tx/0cf2fc7495b437e225d612076628a0c4778e693428f1618e775e98e9349 2b1a5/ -0.23755015 Bitcoin https://live.blockcypher.com/btc/tx/9c2f96a9ba55d534999df089ef1c8317f284584594a37e2effe06d7e2893 2501/ -12.30182882 Ethereum https://etherscan.io/tx/0xf98d4a048c0e5833b548ec44753622963d903f155b74b4943fd9c64afb95c3a3 It's affected over 100 people. Hopefully your guy can catch these bastards.
- 34. 6. Pump & Dump Schemes and Groups •Pump & Dump groups are not something new in the traditional market and are also common in the crypto market. •You will find many crypto groups with thousands of members. These groups are the tools to manipulate the prices of coins that have low market caps. •In this way, people who act fast or first get the advantage and the people who are a bit late suffer from the plummeting prices in just a matter of minutes. •There are several tools available in the market to monitor the volume increase in a particular crypto which helps in identifying such schemes. Cryptocurrency scams to be aware of
- 35. 7. Impersonators •The most sophisticated form of scam. •In this type of crypto scam, scammers make fake Twitter and Facebook account to impersonate the actual legit project or the person behind it. •You will find many impersonators on Twitter acting like Vatalik Buterin or major coin CEO’s who make announcements which are never true. •Also, scammers have started acting as crypto exchange support staff to scam people of their crypto funds. Cryptocurrency scams to be aware of
- 36. BITMAIN SCAM Dear Limited time offer for registered users! We are proud and happy to announce Antminer S11-1 Presale! Also, as we promised, coupon will be activated for each Antminer S11-1 purchased. Shipping date estimated: First 1000 Antminers S11-1 purchased will be shipped on June 20-28. Second 10000 Antminers S11-1 purchased will be shipped on July 18-26. Public sale of Antminer S11- starts on 31 August with 2600$ price, while we offer you to reserve your Antminer S11-1 for best price now. Don’t miss opportunity to get your Antminer S11-1 first! Presale expiry date is 06:59:59, 12th, June, 2018 (Beijing time, GMT+8). Please find additional information about our offer in PDF file attached. Customer details Thank you for choosing Bitmain. Best Regards, The Bitmain team
- 37. BITMAIN SCAM just got another email right now i just removed my data but its 100% correct phone address everything Second Round! Limited Time Offer – Antminer S11-1 Dear XXX Limited time offer for registered users! We are proud and happy to announce Antminer S11-1 Presale! Also, as we promised, coupon will be activated for each Antminer S11-1 purchased. Shipping date estimated: First 1000 Antminers S11-1 purchased will be shipped on June 20-28. Second 10000 Antminers S11-1 purchased will be shipped on July 18-26. Public sale of Antminer S11- starts on 31 August with 2600$ price, while we offer you to reserve your Antminer S11-1 for best price now. Don’t miss opportunity to get your Antminer S11-1 first! Presale expiry date is 06:59:59, 12th, June, 2018 (Beijing time, GMT+8). Please find additional information about our offer in PDF file attached. Customer details Thank you for choosing Bitmain.
- 38. Conclusion •Scams in any industry are not a new thing and crypto being a decentralized and open source concept can be one of the easiest to manipulate. •The only way to not get scammed is to trust legit sources of information, as well as self-education of investors through trusted sources. DMG Forensic Services can reduce the risk for you or can assist with recovery by using its Blockseer and WalletScore software to provide assurance and information surrounding wallet and crypto movements. Cryptocurrency scams to be aware of
- 39. Heists, Thefts, Hacks…………. Let’s look at some:
- 40. Coincheck exchange hacked - $534 Million stolen The Biggest Hack in the History of Cryptocurrency
- 41. A short history of cryptocurrency theft • 1: July 4th, 2017: Bithumb hacked and 1.2 billion South Korean Won stolen. • 2: July 17th, 2017: CoinDash hacked and $7 million in Ethereum stolen. • 3: July 24th, 2017: Veritaseum hacked and $8.4 million in Ethereum stolen. • 4: July 20, 2017: Parity Technologies hacked and $32 Million in Ethereum stolen. • 5: August 22nd, 2017, Enigma marketplace hacked and $500,000 in Ethereum stolen. • 6: November 19th, Tether hacked and $30 million worth of tokens stolen. • 7: December 7, 2017: NiceHash hacked and $70 million stolen. • 8: December 21, 2017: EtherDelta hacked and $266,789 in Ethereum stolen.
- 44. Blockseer Product Suite in action: ●Coincheck NEM Theft ●MyBTGWallet Scam Forensics
- 45. Blockseer Product Suite -Blockseer Blockseer Walletscore
- 47. NHK featured Blockseer in NEM investigation https://www.dailymotion.com/video/x6jei5n
- 48. Let's retrace the NEM investigation, starting with this address…
- 49. Enter 12dn… at blockseer.com
- 50. Let's see where this address sends money
- 51. 12dn… holds only a small value, but it leads to a jackpot! 12dn.... 15,000 BTC
- 52. If we did not have Blockseer's "clustering" feature…
- 53. Where did all that money come from? Tried to hide tracks 追跡から逃れるための取引き 15,000 BTC still here 15,000 BTC は、いまだこれらのウォレットに滞留
- 54. Summary: Coincheck NEM Theft
- 55. Let's investigate this transaction on Blockseer... Nov 16, 2017, 10:37 AM to me Hi Sheldon, The website is called mybtgwallet and was officially endorsed by BTG team both on their website and via twitter. They took my BTC and ETH in the following fraudulent transactions, but seemed to have left LTC [which I promptly removed from my wallet]: -0.22545683 Bitcoin https://live.blockcypher.com/btc/tx/0cf2fc7495b437e225d612076628a0c4778e693428f1618e775e98e9349 2b1a5/ -0.23755015 Bitcoin https://live.blockcypher.com/btc/tx/9c2f96a9ba55d534999df089ef1c8317f284584594a37e2effe06d7e2893 2501/ -12.30182882 Ethereum https://etherscan.io/tx/0xf98d4a048c0e5833b548ec44753622963d903f155b74b4943fd9c64afb95c3a3 It's affected over 100 people. Hopefully your guy can catch these bastards.
- 57. Let's check out the thief's address at Walletscore... Walletscore gauges a wallet's history of enabling criminal activity. The goal: •Create a mapping from all wallets to some measure of risk. Three steps: 1.Labeling 2.Clustering 3.Scoring
- 58. Blockseer Product Suite in action: ●Coincheck NEM Theft ●MyBTGWallet Scam Forensics Labeling
- 59. Blockseer Product Suite in action: ●Coincheck NEM Theft ●MyBTGWallet Scam Forensics Clustering •Common inputs •Coinjoin heuristics •Change address heuristics •Manually determined •Wallet topologies •Transaction patterns
- 61. Thank-you for participating Sheldon Bennett sheldon@dmgblockchain.com Simon Padgett simon@dmgblockchain.com Timothy Eller time@dmgblockchain.com DMG Blockchain Solutions Inc. Suite 490 – 1090 Homer Street Vancouver B.C. V6B 2W9 info @dmgblockchain.com Direct: 778-868-6470 Toll Free: 1-888-702-0258 TSX.V:DMGI DMGBlockchain.com j.gerard@i-sight.com Find more free webinars: http://www.i-sight.com/resources/webinars @isightsoftware