06.12.2021

American lost hundreds of thousands of dollars and sued the parents of the developers

Colorado resident Andrew Schober lost 16 BTC back in 2018 after downloading suspicious software from the social platform Reddit. In dollar terms at that time, the amount of his loss reached 220 thousand dollars and amounted to 95 percent of his personal savings.

Schober suspects two minors of fraud – Benedict Thompson and Oliver Reid – who created a fake crypto wallet, which allegedly became a tool for stealing coins. The victim is not going to give up: now he is defending his right to compensation in court proceedings with the parents of the suspects.

Note that the loss of large amounts of cryptocurrency due to software has indeed happened before. For example, in September 2020, it became known about an investor from whom 1,400 bitcoins were stolen. He has kept them since 2017, but in the end he could not sell them. This is due to the old version of the Electrum wallet with a known vulnerability. For some reason, he installed it, after which the hackers sent coins to themselves. Read more about the story in a separate article .

Fake wallets themselves operate in a variety of ways. Some immediately ask potential victims to enter a seed phrase from their address – that is, a unique combination of 12, 18 or 24 words that opens access to cryptocurrency. Naturally, this cannot be done. As well as revealing a mnemonic phrase to any of the people, publishing it on the Internet or writing it down in notes on a smartphone.

There are also programs that are not so obviously deceiving people. They spoof the addresses to which the victim is sending cryptocurrency. Thus, users ‘money goes to hackers’ wallets.

That is why experienced users of digital assets recommend that you double-check the address to which the funds are transferred. By the way, the displays of hardware wallets like the Ledger we already know are not affected by viruses and malware. Therefore, they display exactly the address to which assets will truly be sent. And it may differ from what is shown on the display of the infected computer.

How bitcoins are stolen

Schober’s situation is similar to the thousands of other stories of fraudulent victims. The victim downloaded a cryptocurrency wallet from a dubious source and used it. The program substituted the cybercriminals’ address into his transaction, which led to a complete loss of funds.

However, Schober did not give up and spent more than $ 10,000 on detailed tracking of his coins. This led him to join two teenagers in the UK with some experience in software development. According to court documents, the victim has suffered “significant torment over the past three years” and is not going to leave the case – he wanted to use the lost money to buy a house and financial support for his family.

It is easy to understand the suffering of a victim of a scammer. First, a quarter of a million is a large amount initially. Secondly, this amount in cryptocurrency has grown significantly since then. We checked the actual data: with today’s Bitcoin exchange rate of $ 47,735, 16 BTC translates into $ 763,000. Accordingly, since then, the volume of savings has increased by almost 3.5 times.

bitcoin chart cryptocurrency rate

Bitcoin price chart from 2018

It is noteworthy that initially Schober wrote a letter to Reed’s parents asking them to voluntarily return the funds. Here is a quote from there, quoted by Decrypt .

Your son is a very smart young man. I don’t want to steal his future from him.

Obviously, the victim of the burglary decided to act through the parents to increase the chance of a refund. However, the idea of ​​getting the cryptocurrency back a few years after the loss seems strange, since anything could happen to these coins.

Bitcoin coin cryptocurrency

After the rapid growth of the crypto market, the amount of potential losses of the victim increased to almost a million dollars

The letter was left unanswered, so Schober decided to resort to legal proceedings. In its course, one more detail was revealed – the parents do not deny that their children stole the cryptocurrency, which means that the fact of their guilt is practically proven. Now Schober’s lawyers are trying to prove that compensation for the financial damage of the victim rests on the shoulders of the parents.

We believe that it will be difficult for a victim of fraud to get their funds back – and above all, given the time elapsed. In addition, it is not a fact that the court will be convinced by evidence that is related to such an innovative topic as blockchain and cryptocurrencies. Perhaps the time has not yet come for that.

In general, the situation once again reminds of the precautionary methods that should not be forgotten when working with digital assets. Never use programs from unverified sources and be sure to check the addresses to which coins are transferred.

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