The cryptocurrency market has been rocked once again! A BTC theft that took place at the end of 2020 has finally come to light after five years.
China’s famous LuBian mining pool was hacked due to a bitcoin private key generation vulnerability, losing 127,426 bitcoins in an instant, with a market value of more than US$14.5 billion at current prices, making it the largest bitcoin theft in history!
Bitcoin Theft: LuBian Mining Pool Lost Overnight
The attack took place on December 28, 2020, according to a report by Arkham Intelligence, a chain analysis firm. At the time, the price of Bitcoin was only about US$27,500, with losses amounting to US$3.5 billion, but as the currency has risen sharply, it is now worth US$14.5 billion.
The scale of this incident even surpassed the Mt. Gox cryptocurrency theft that rocked the world in 2014. Although Mt. Gox lost more Bitcoins (744,000), the market capitalization at the time was only a few hundred million dollars, which is not nearly as large as the value of LuBian’s loss.
The hacker’s stolen Bitcoins were dispersed in multiple wallets and a consolidation of assets took place in July 2024, after which there was no further transfer. The hacker is still in possession of all the stolen Bitcoins and has even risen to become the 13th largest Bitcoin holder in the world.
Hacking techniques revealed: BTC private key vulnerability becomes a fatal breach
The report pointed out that LuBian pool used low entropy random function in the process of generating BTC private key, which led to insufficient security of the private key. Hackers successfully deduced the private key through ” brute force cracking ” and gained control of the wallet.
This type of cryptographic private key vulnerability is similar to some of the earlier wallet code (e.g., Trust Wallet’s 32-bit random number problem) and highlights the fact that the security of the private key generation algorithm is critical.
LuBian pool’s cry for help: 1,516 linked messages
After the incident, LuBian did not choose to report the incident to the police, but instead sent 1,516 small transaction messages (costing about 1.4 BTC) to the hackers through the OP_RETURN field of the Bitcoin blockchain, pleading for the return of assets and even promising to pay a reward.
However, these chained “pleas for help” remain unanswered, and in February 2021, the LuBian pool was completely shut down, with the bitcoin theft widely believed to be the fatal cause of its demise.
LuBian’s current asset position
- Hacker holdings: 127,426 BTC (now worth about $14.5 billion)
- LuBian’s residual assets: 11,886 BTC (current value ~$1.35 billion)
Bitcoin theft warning: private key security is the first line of defense
This crypto theft once again highlights the importance of private key security. When the amount of money stolen from cryptocurrencies can be in the billions of dollars, any vulnerability in a private key can cause irreparable damage.
As the crypto market continues to grow in size, experts warn:
- Bitcoin private keys must be randomized and algorithmically secure to avoid weak encryption problems.
- Wallet developers need to strengthen the underlying security checks to avoid the repetition of historical loopholes.
- Investors should emphasize on “cold wallet and self-custody” to diversify the deposit risk.
Disclaimer
This article is provided by TechDuker for informational purposes only and does not constitute any investment advice or financial product recommendation. The stock and cryptocurrency markets are highly volatile, investors should carefully assess their risk tolerance and consult a qualified professional advisor if necessary, TechDuker will not be responsible for any losses incurred as a result of any investment decision or behavior.
Conclusion: Cryptocurrency theft risk is difficult to solve, the industry needs to strengthen security mechanisms
The Bitcoin hack from the LuBian pool has become the most shocking BTC theft in crypto history. Although the hackers have not moved any of their assets so far, the market is highly concerned and if there is any sign of a transfer, it will send shockwaves around the world.
In the future, the only way to prevent the tragedy of ” Bitcoin theft and cryptocurrency theft ” from happening again is to strengthen the BTC private key generation, blockchain security framework and wallet algorithm.
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