A long-time Bitcoin investor and his father discovered last week that about 25 BTC ($919,000) that the family had been storing in a personal wallet since 2012 was stolen from them in September.
The online Bitcoin community is now coming to their aid and the victim is proposing a bounty of 23 BTC for anyone who can get the money back.
Insecure private keys
In a video posted by X user @RMessit (aka Rick) on Saturday, the victim said that his Bitcoin wallet’s private key was stored in a self-hosted password manager called KeePass.
The KeePass vault could only be unlocked using a different password that only the two men knew. However, this password only contained 30 bits – far fewer and less secure than the standard Bitcoin private key itself, which is 256 bits long.
Although he is still unsure how his private keys were accessed, Rick suspects that someone keylogged his device and observed him entering his KeePass password. He confirmed that the device storing the private key was connected to the internet.
“It’s especially heartbreaking that I’m writing this from our first father-son pilgrimage to El Salvador,” Rick added. El Salvador was the first country to make Bitcoin legal tender in 2021 and has launched various initiatives to advance public acceptance of BTC as a transaction currency.
Rick encouraged Bitcoin users to purchase a standard hardware wallet to “keep your sats in cold storage.” Modern hardware wallets allow Bitcoin users to securely store and send coins without exposing their private keys to the Internet, protecting them from online hackers.
In 2012, there were no hardware wallets or seed phrases – human-readable lists of 12 to 24 words that stored private key data in a way the brain could remember.
On the trail of coins
Other Bitcoiners are already making progress in finding the thief. One user, @coinableS, noted that the hacker reused his Bitcoin addresses and that his attempts to mingle his coins were relatively weak.
CoinableS also noted that after the hack, the hacker withdrew coins from the Binance hot wallet to one of his addresses. Since Binance follows “Know Your Customer” procedures, Rick asked the exchange and its founder Changpeng Zhao to help find out who owns the address.
In case of recovery, the victim has no intention of keeping the BTC. He suggested keeping only 1 BTC for himself, donating another BTC to charity, and leaving the rest to a bounty hunter.
“A withdrawal of just 1 BTC would send me into a frenzy, so I think it’s perfectly reasonable,” he said. “Also want the bounty to be as high as possible to give a lot of incentive for someone to hunt those bastards.”
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