Bitcoin Developer Luke Dashjr Loses All Bitcoins in a New Years Hack

Bitcoin developer Luke Dashjr. (PHOTO: twitter @LukeDashjr)

JAKARTA - One of the Bitcoin developers, Luke Dashjr, claims to have lost all his BTC because of a hack that happened just before the new year.

In a Jan. 1 post on Twitter, the developer said the alleged hacker had somehow gained access to his PGP (Pretty Good Privacy) key, a common security method that uses two keys to gain access to encrypted information.

In the thread, he shared the wallet address where some of the stolen BTC had been sent but did not disclose how much of the total stolen BTC was.

At the time of writing, the wallet address in question shows four transactions between 2:08 p.m. and 2:16 p.m. UTC on December 31, totaling 216.93 BTC — worth $3.6 million at current prices.

Dashjr said he has "no idea how" the attackers got access to his keys, though some in the community have pointed out a possible connection to Dashjr's previous Twitter post on November 17 noting that his servers had been compromised by "new malware/backdoors on the system."

Dashjr notified users in his latest Twitter thread that he only became aware of the recent hack after getting emails from Coinbase and Kraken about anonymous login attempts.

The incident also caught the attention of Binance CEO Changpeng “CZ” Zhao, who offered his condolences and support in a January 1 post.

“Sorry to see you lose so much. Inform our security team to monitor. If it comes our way, we'll freeze it. If there's anything else we can help with, let us know. We deal with this a lot, and have Law Enforcement (LE) relationships around the world," he wrote.

Some in the crypto community have speculated that weak security may have been the cause of the loss.

In a Jan. 1 Reddit thread, a user calling himself SatStandard suggested that Dashjr may not have taken the Nov. 17 security breach "serious enough" and then suggested that Bitcoin developers "don't separate different activities."

“He has a hot wallet on the same computer he does everything else. It seems he is completely complacent,” said SatStandard.

Meanwhile, several others seem to suggest it may not be a hack at all, suggesting that someone had found the initial phrase somehow, or that it was part of an unprofitable "boating accident" before tax season.

Boating accidents in this context refer to jokes and memes originally used by gun enthusiasts, but have since been transformed by the crypto community about people trying to evade paying taxes by claiming they lost all their BTC in a “tragic boating accident”.

Cointelegraph attempted to contact Dashjr via Twitter for more information on the alleged hack but had no word at the time of publication.

The news also sparked debate around self-custody, which became a hot topic after FTX's collapse last year.

Zhao Binance, who previously warned the crypto community about self-custody, said: “Sad to see even OG #Bitcoin Core Developer lose 200+ BTC ($3.5 million). Self-custody [has] a different set of risks.”

Online social media BTC influencer Udi Wertheimer also took the time to question whether self-custody is a viable and safe option. “A person “shouldn't be managing your own keys,” Wertheimer said.

“If one of the OG Bitcoin developers screws this up, I really don't know how anyone else is expected to do it safely,” said Wertheimer. “Not that self-custody is bad. But you shouldn't manage the keys directly,” he said.