The co-founder of IOTA, Dominik Schiener has told Reuters that a majority of the 10 million Euros ($11.4 million USD) in IOTA crypto tokens that police believe was stolen by a lone hacker from Oxford, England, has been located,
The 36-year-old accused hacker was arrested last week by cooperating UK and German law enforcement.
It is believed the man stole IOTA tokens from 85 victims globally in a spree of thefts that started in January 2018, when IOTA was trading for ~$5 USD.
It now trades at ~$0.26, meaning $11 million in IOTA stolen last year may only be worth around ~$418 000.
The stolen IOTA crypto is now reportedly being held as evidence.
After stealing the tokens, the hacker reportedly sent them to his own crypto “hot wallets” (cryptocurrency wallets accessible by Internet) obtained on exchanges using fake ID.
If Schiener’s claims are true, this suggests that exchanges were alerted to the thefts early enough to lock the funds or that the hacker was incompetent about locating them.
Schiener states a majority of the funds have been locked at exchanges:
“From what we know, just a small amount of the 10 million euros has not been found…The exchanges have blocked the hacker’s accounts. He tried to free the money, but he did not succeed.”
Previous reports indicate that the hacker managed to trick IOTA holders into using a “malicious” 81-digit password, or “seed,” to lock their hot wallets with.
IOTA traders/holders can use “seed generators” available online to create passwords.
The hacker reportedly set up a fake seed generator at Iotaseed.io and thereby obtained password access to numerous IOTA hot wallets.
IOTA token storage has since been supported by the Ledger crypto cold wallet (offline hardware storage device).
In May of last year, University College London announced it was cutting ties with the IOTA Foundation after IOTA co-founder Sergey Ivancheglo (no longer at IOTA) threatened esteemed MIT cryptography researcher Ethan Heilman with a lawsuit after Heilman and MIT published claims they’d found a serious problem with the security of IOTA’s cryptography.
According to the IOTA website, IOTA’s ‘”tangle network” is:
“The first open-source distributed ledger that is being built to power the future of the Internet of Things with feeless microtransactions and data integrity for machines.”
Security is crucial as more and more private and public machines and systems become connected to the Internet.