Police Arrest Suspect For 20 Million CNY Bitcoin Theft Case In Shanghai
December 23 2017, according to a CCTV report, Chinese police has arrested a senior programmer for stealing up to 20 million CNY worth of bitcoin. On July 27 2017, Zhongyuan Oilfield Police Department of Henan Province received a theft report from Mr. Wu, who claimed that he had lost 3.34million worth of bitcoin. As a professional investor, Wu has been investing in Bitcoin since 2016. In early 2017, he was invited to join a WeChat group of bitcoin investors.
According to the police investigation, the owner of the Wechat group often spread information that it was risky to store bitcoin on exchanges. When victims were scared and looked for solution, he would told them that he could provide instruction for safe storage of bitcoin. According to the screenshot of CCTV report, Dai guided victims to transfer BTC to the web wallet of coinb.in, which he claimed to be absolutely safe. A reddit post two years ago reveals that Dai has been plotting the scam for a long time.
The post indicates some test tx to obfuscate the source.
According to the chat log, Mr. Wu deposited 188.31 BTC to the wallet software given by Dai on 16 July 2017. However, Wu was surprised to find that the balance went down to zero after he returned from holiday on 25 July. He then contacted Dai for explanation but Dai kept dodging the questions. But what surprise Wu most was Dai proposed to compensate him for up to 10 BTC worth of money. Dai later transferred the money via Alipay.
After primary investigation, police believed that Dai was the primary suspect. On 9 August, police detained Dai in his house in Shanghai. Then the whole story revealed.
Dai was good at programming and he planted Trojan that could transmit user name and password to him. He then would mixed bitcoin among hundreds of wallets. Then he sold them via exchange. 3 cases has been identified and over 20 million CNY are involved. Dai’s bank account with over 2 million CNY has been frozen by police.
Some Chinese OTC traders told 8btc that Dai had been practicing the “middleman attack” in the community for quite a while. He pretended to be a buyer or seller using a secondary wechat account, which would be discarded after pulling the scam. His case also resulted in blocking of some traders’ bank account.
This was the first bitcoin theft case cracked down by Chinese police authority.