Theft of $4.5 million in cryptos by claiming to have lost his password

UPGRADE DAY

A daring cryptocurrency theft has taken place from a business in Westmount. The thief managed to break into the computer system and embezzle $4.5M in valuables by making it look like customers had forgotten their passwords. 

During in recent weeks, Alt 5 Sigma has gone to court to recover 12 stolen wallets from customers.

The company says it was the victim of the theft a few days before Christmas in December 2021.

Photo taken from a press release André Beauchesne
CEO of Alt 5 Sigma

The value of the stolen wallets reached US$4.5 million at the time, but it has since fallen to US$2.7 million due to the fall in value of several cryptos.

However, we are far from the traditional armed bank robbery as we saw in the past. The larceny was done only digitally.

The thief, identified only as John Doe in the legal proceedings (because his identity is unknown), allegedly used a clever ploy to evade security. 

He allegedly altered email addresses attached to accounts and then pretended to have forgotten his password to access the loot.

THE THEFT IN 5 STEPS 

1. The thief allegedly accessed Alt 5 Sigma's computer system from an IP address in the company's offices and with an administrator password

2. Once in the system, the thief altered email addresses attached to customer accounts

3. The old addresses have been replaced by new addresses with unusual names such as gugxoxollinyp@alilot.com or enormousf.ou.n.d1.9.5.7@gmail.com

< strong>4. Once the addresses were changed, the thief attempted to log into the accounts claiming to have forgotten his password

5. He has had the correct password emailed to him and has access to the cryptocurrencies which are then transferred to other platforms

Quick to court

The firm went to court urgently at the end of 2022 to compel several cryptocurrency platforms where the money was allegedly sent to provide it with information on the identity of the thief alleged and on transactions made. 

Some targeted platforms have only an email address and no known physical address, it is alleged.

Cryptocurrency giant Binance is also among the companies targeted. Although linked to an address of a Montreal law firm, she reportedly did not respond to requests for information from Alt 5.

At the end of 2022, Judge Micheline Perreault of the Superior Court granted Alt 5's requests. The order was then renewed for 30 days by Judge David Collier.

Complaint to the police

The incident was reported to the police and the insurance company, according to the firm. Even a complaint to the FBI, in the United States, has been filed, the legal proceedings indicate.

The company says it has reimbursed affected customers in full with its own funds.

The thief “continues to go to extra lengths to hide the assets by dividing them into dozens of transactions, moving them between different cryptocurrency exchanges, exchanging them for other types of cryptocurrencies and even mixing the cryptoassets” , alleges the company.

Mixing, or mixing in English, is a process in which multiple transactions are made with the aim of blurring the trace of transfers of funds. 

► Among the stolen currencies, there are 50.98 bitcoins, 1.6 million tethers, 68 ethereums and 22.8 million Shiba Inu (a cryptocurrency named after a Japanese dog).&nbsp ;

ALT 5 SIGMA AT A GLANCE 

• Platform for buying and selling digital assets.
   
• Former Conservative cabinet minister Lawrence Cannon and Bloc member René Villemure served on the board.
   
• Led by André Beauchesne, co-founder of the advertising agency Bos.
   
• Based in New York, but with offices in Montreal .

THREE CRYPTOS THEFTS THAT MADE HEADLINES

The alleged theft at Alt 5 Sigma is far from the only one to have taken place in recent years .

• In the United States, authorities announced in 2022 that they had arrested a couple who had stolen 94,000 bitcoins in 2016 from the Bitfinex platform. They were then worth US$3.6 billion. during a hack 
• FTX, the platform of fallen billionaire Sam Bankman-Fried, said it was robbed of more than US$370 million in crypto 24 hours after declaring bankruptcy

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