Core Bitcoin developer Luke Dashjr has revealed that he lost almost his entire BTC fortune after his PGP (Pretty Good Privacy) key was compromised just before the turn of the year.
In a tweet on Sunday, the developer explained that its PGP key, a common security method that uses two keys to access encrypted information, was somehow compromised by hackers, resulting in the theft of over 200 BTC coins from worth more than $3.5 million. .
When asked by a Twitter user if he was concerned about how attackers could have accessed his key, Dashjr replied that he had “no idea”.
Some members of the crypto community pointed to a possible link to a previous Twitter post by Dashjr on November 17, which stated that its server had been compromised by “new malware/backdoors in the system.” However, the developer couldn’t confirm that either.
Meanwhile, Dashjr has advised the bitcoin community against downloading Bitcoin Knots, a combined bitcoin node and wallet that ensures the bitcoins you receive are both genuine and truly yours until the issue is resolved. He said:
“DO NOT DOWNLOAD OR TRUST BITCOIN KNOTS UNTIL THIS ISSUE IS RESOLVED. If you’ve done this in the past few months, consider closing for now.”
According to his LinkedIn profile, Luke Dashjr has been a Bitcoin Core developer since 2011. He is also said to have over 23 years of programming experience.
In a comment, Binance CEO Changpeng “CZ” Zhao said he was saddened by the incident and offered his support. He also mentioned that self-custody comes with some risk, as users have to protect their private keys themselves from being stolen. He wrote:
“I’m sorry you’ve lost so much. We’ve notified our security team who are monitoring the incident. If it gets to us, we’ll block it. If there’s anything else we can tell you help, please let us know. We deal with cases like this often and have relationships with law enforcement around the world.”
The incident also reignited a debate over self-custody, which became a hot topic after FTX collapsed last year. Joe Vezzani, CEO of LunarCrush, a platform that provides social listening analytics to cryptocurrency investors, claimed the loss was insignificant compared to the billions lost on centralized exchanges.
However, the crypto boss mentioned that the majority of self-custody losses go unreported. He added that not all crypto exchanges are FTX and not everyone in the crypto space is like Sam Bankman-Fried, the exchange’s disgraced founder. He said:
“SBF is not the same as all centralized exchanges. Just like Madoff is not the same as all stockbrokers.”