Bloodless heists in the time of crypto, SWIFT

No bullets are fired nor lives risked. Presumably, the thieves sit comfortably at home in front of their computers and do little physical exertion during the course of their crime. (Illustration by Suneesh K.)

The uncovering of a massive crypto heist in which cryptocurrency exchange Bitfinex was in 2016 robbed by hackers of 1.2 lakh bitcoins, worth about $70 million then, points to the sheer scale of such thefts fuelled by the staggering rise in the value of some virtual currencies. At today’s price, the loot is worth a staggering  $4.5 billion, putting into shade many legendary bank robberies of the past.

Predictably Ilya Lichtenstein and Heather Morgan, who have been arrested in connection with the Bitfinex robbery, call themselves “serial entrepreneurs” focused on bitcoin technology and the B2B space. That’s in the time-honoured tradition of the famous bank robbers who all considered themselves as artists rather than scamsters.

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The Knightsbridge Security Deposit robbery of 1987 is generally believed to have been the largest ever, with $97 million looted from several safe deposits in a centre in London by Italian con-artist Valerio Viccei who already had 50 cases of armed robbery against him. Viccei’s accomplice was an insider, the managing director of the centre, Parvez Latif, who needed the money to pay off his debts that he had piled up as a regular cocaine user. The story had a curious ending as Viccei, who decamped with his loot to South America, was arrested by the cops when he briefly returned to England to ship his Ferrari to his new home.

No robbery, of course, is greater than what Iraqi dictator Saddam Hussein attempted just before his country was invaded by US troops in search of the non-existent Weapons of Mass Destruction (WMD). In 2003, just before the beginning of the war, three large trucks rolled into the country’s Central Bank in Baghdad. Accompanied by his son Qusay who carried a handwritten note from Saddam, they withdrew about a billion dollars, ostensibly to prevent it falling into the hands of the invaders. After loading the cash into vans, the party drove away to an unknown destination. Unfortunately for Hussein, the war sent him scurrying into hiding and the looted money was recovered though reports emerged of American soldiers helping themselves to parts of it, for the welfare of their families back home.

But for all the huffing and puffing that went into engineering such heists, the returns seem meagre and the chances of being shot made the risks seem too high.

Today’s technology-driven heists by contrast seem so much more rewarding. After all, breaking into a network is certainly safer than breaking into a bank. In February 2016, for instance, hackers lifted millions of dollars using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network of Bangladesh Central Bank. SWIFT is the ostensibly safe international money transfer system that banks use to move billions of dollars daily between themselves. When the first news headlines filtered in, they suggested the hack was limited to transferring $81 million from various accounts at Bangladesh Central Bank to multiple accounts in Rizal Bank in the Philippines. It turned out later that a bank in Vietnam had also been targeted though the money transfer was blocked at the last minute. By the time the heist was discovered, most of the money had already been withdrawn.

No bullets were fired nor lives risked in pulling off that multi-million dollar caper. Presumably, the thieves sat comfortably at home in front of their computers and did little physical exertion during the course of their crime.

Even that ripoff now looks minor league in the age of cryptocurrencies. No longer do you need much daredevilry, with investors queuing up to hand over hard-earned savings to today’s crypto criminals. Last year, after the Central Bank of Turkey banned the use of digital currencies, Faruk Fatih Ozer, the 28-year-old founder of cryptocurrency exchange Thodex, fled the country with about $2 billion that thousands of users had willingly invested in trading on the fraudulent exchange. Almost at the same time, in South Africa, two brothers, Raees and Ameer Cajee went missing after informing users that their cryptocurrency platform Africrypt had been the victim of a hack, compromising their accounts and wallets. The hit from that bit of chicanery was nearly $3.6 billion.

Also read: Crypto Wrap: From China crackdown to bitcoin heist, a look at all the action in cryptocurrency space this week

India, too, has had its share of crypto scams. Last year, the police in Bengaluru stumbled upon the curious case of Srikrishna Ramesh alias Sriki, a 25-year-old who is now facing charges of cyber fraud, drug peddling via dark net, theft of cryptocurrency and even stealing money from Karnataka government’s e-governance portal.

That last really sums up the new face of digital heists.