Nanchang Public Security Cracks Elaborate Scheme In Crypto Racket

  • Nanchang Public Security Cracks Elaborate Scheme In Crypto Racket

    Chinese blockchain journalist Colin Wu (@WuBlockchain) tweeted a piece of alarming news. User information from Chinese cryptocurrency exchanges was leaked, leading to the first large-scale cryptocurrency theft case in the Jiangxi Province.

    His tweet said China had arrested six suspects who used hacking software to steal user information from the crypto exchange. He further added:

    "It shows that the personal information of users of Chinese cryptocurrency exchanges has been leaked very seriously, and a large amount of user information is sold online."

    No Connection Between Victim And Suspect
    On February 23rd, the victim, Huang, suddenly discovered that his mobile phone number was reported as lost. Soon after, he found that the cryptocurrency tied to the phone number had disappeared. The virtual currency was worth ~RMB 14.5 million in bitcoin and radar coins.

    Huang reported the crime on February 26th, and the Qingyunpu Branch quickly filed a case for investigation. The suspect, Deng, did not contact Huang, neither had they shared any contact information. So how did the suspect steal the highly secure cryptocurrency without any trace of the crime?

    Case Sees Breakthrough In 12 Hours
    The task force's anti-fraud police made extensive visits to hotels and cell phone operators, investigating their records and data. The investigation revealed that five men and women of Lianyungang, Jiangsu, drove to Nanchang with forged documents.

    These preliminary clues helped the task force combine operations with all relevant departments to successfully narrow the suspects' information. It took the task force less than 12 hours to lock this information and achieve a breakthrough.

    Deng's associate used the forged documents to claim the loss of phones used by the victims. Once the victims' mobile phone cards were reissued, Deng and his associates used them to receive the login verification code for accessing the crypto platform to steal the tokens on it.

    Hacking Technology Used To Steal User Information
    The task force seized more than RMB 1.4 million in cash from Deng's home, as well as a large number of mobile phones, computers, and various forged documents used for crimes. The other suspects were captured over the next couple of days.

    Deng used purchased hacking technology to steal user information from the cryptocurrency platform's back-end. He then hired the others to pretend to be the victims, using the forged documents. Once they obtained the reissued mobile cards, getting the verification code and logging into the platform to transfer the cryptocurrency was a breeze.

    Based on the preliminary investigation and evidence, the task force dug out the cybercrime gang, ending the particular criminal enterprise and solving the cybercrime. Six suspects have been detained as per the law, and the case is pending further trial.

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