When the man known as “The Bitcoin Jesus” got hacked, he did not go straight to the police. He just tapped the power of bitcoin.
Last week, Roger Ver–an American-born ex-pat living in Japan who’s long been at the heart of the worldwide bitcoin community–was contacted by a hacker who had seized control of his old Hotmail account and used it to nab his Social Security number, passport number, and other personal information.
The hacker threatened to exploit this information unless Ver forked over about 37 bitcoins, the equivalent of $20,000.
But then Ver used the same number of bitcoins to put out a bounty on the hacker, and this instantly transformed the brazen cyber criminal into a penitent stooge.
“Sir, I am sincerely sorry. I am just a middleman. I was being told what to tell you,” the hacker told Ver soon after the bounty was posted, before later asking: “Are you going to order a hitman to kill me now?”
Libertarians have long hailed bitcoin as a way to free the world from the control big government and big banks. But with his 37-bitcoin bounty, Ver has given the world’s most popular digital currency a new kind of libertarian cred.
For Ver, the digital currency is not just a way of storing and moving money without help from the authorities. It’s also a way seeking justice too, a lesson that’s laid out in the Skype chat logs that Ver provided of his conversation with the hacker. Sure, you can wield this type of bounty using other currencies–and many have–but there’s something particularly appropriate about doing this with bitcoin.
‘This Won’t Be Pleasant’
The hacker goes by several names — Nitrous, Savaged, and Clerk1337 to name a few. When he contacted Ver, the bitcoin investor and an acquaintance–Jason Maurice, the chief hacking officer of Japanese security startup Wiz Technologies–already were engaged in what became an hours-long effort to regain control of multiple online accounts seized by the hacker, whom Ver believes acted alone.
Nitrous had taken control of an old Hotmail account that belonged to Ver–apparently using public information to answer the email service’s security questions–and then he had used it to commandeer the memorydealers.com internet domain, an address used by Ver’s computer parts business. Nearly 15 years ago, Ver used the Hotmail address to register the domain, and with control of the address, Nitrous take over the domain by way of Ver’s domain name registrar, Register.com.
The account take-overs gave Nitrous access to personal information about Ver’s mother as well as his passport number and Social Security number, and he threatened to sell this info to “fraudsters” who would “ruin both of your lives” unless Ver handed over 37.63289114 bitcoins, a neat $20,000.
“I think we both know this won’t be pleasent [sic] and let’s be honest: there is nothing you can do to have me caught. I’ve been around too long,” Nitrous wrote. Then he paid Ver an almost wistful compliment: “I have to say: I respect you as a BTC user/icon.”
Ver–a one-time Libertarian candidate for public office–is among the world’s most prominent and vocal bitcoin activists and investors.
Since learning about the digital currency in 2011, Ver has traveled the world, speaking at bitcoin conferences and using his bitcoins to back more than a half-dozen startups, including Blockchain, Bitpay, and Ripple. Ver won’t say how many bitcoins he owns, but because he was involved in bitcoin so early on, Nitrous apparently thought a $20,000 shakedown would be no big deal.
Nitrous didn’t respond to a inquiries from WIRED, but in the chat transcript provided by Ver, the hacker claimed to have also hacked tween internet sensation LOHANTHONY and random-fact-Tweeter UberFacts.
After Nitrous had established that he’d hacked Ver, the bitcoin enthusiast tried to stall him — buying for time as he and Maurice tried to regain control of the hacked accounts. After about an hour of taunting and negotiations, Nitrous’s patience was wearing thin. He threatened to “own” Ver 10,0000 times harder. “You Fag,” he wrote.
“Listen, my mom needs a liver transplant that starts at $15,000, man…I am so sorry for having to do this, but it’s just what I have to do.” Then Ver responded with a link to a Facebook post offering that 37-bitcoin bounty for information leading to Nitrous’s arrest, and Nitrous immediately backed down.
To be clear, Ver didn’t put a bounty on Nitrous’s head. He merely said he’ll pay out the money when Nitrous is arrested for hacking his accounts.
But clearly, bitcoin’s sometimes unsavory connections with the Silk Road online drug marketplace and the bankrupt Mt. Gox bitcoin exchange cause even criminals to think twice.
Ver wouldn’t say whether he has contacted authorities, but in the wild west of bitcoin, a reward like this seems like a thoroughly appropriate response. “I don’t have much faith…in the government police,” Ver tells us. “But I hope that they actually do catch him.”
About a decade ago, Ver’s computer parts-reselling business had about $1 million in goods stolen during a break-in. Tracking parts serial numbers, he located his stolen merchandise in L.A. about a month later. “I called multiple police agencies to let them know I found my stolen parts,” he says. “None of them would lift a finger to help me.
I never got any of it back.” But his bounty has been more effective. Within minutes of posting the bounty, Nitrous handed over the new password to Ver’s Hotmail account. And Ver says he hasn’t caused any trouble since.