Shapeshift former employee allegedly used the access to the exchange’s backend to steal roughly 90 BTC, worth nearly $900,000
Recently, cryptocurrency company ShapeShift filed a lawsuit against its former technical staff, allegedly stealing more than 90 bitcoins from the company’s accounts.
ShapeShift employees have been stealing Bitcoin continuously for over six months
Azamat Mukhiddinov, a former senior software engineer, hired by ShapeShift in August 2018, has been accused of installing an illegal program to steal Bitcoin from ShapeShift corporate accounts to a personal wallet.
The court documents state:
“Azamat Mukhiddinov’s actions took place from November 2019 to May 2020. Azamat earned 90 Bitcoins during that time but was caught after ShapeShift used large amounts of internal and external resources to track it down. Catch the culprit.”
Azamat eventually faced ShapeShift on May 25 and admitted the theft after that. But he confessed to spending some of the stolen Bitcoins and converting it to US dollars.
The exchange said:
“Eventually, Azamat returned, in one form or another, all of the $900,000 in bitcoin he had stolen.”
ShapeShift then had to find a way to reimburse the upfront costs they had to pay to track Azamat. ShapeShift said its employees had to rewrite the code, secure ShapeShift’s software, and thoroughly fix the company’s computer networks, software, and infrastructure.
The company said:
“In total, ShapeShift’s costs and expenses relating to the investigation of Azamat’s theft and the repair of its effects totaled tens of thousands of dollars, if not more.”
Jonathan “Duke” Leto, the founder of privacy protocol Hush, said the fact that an employee stealing 0.5 Bitcoin a day continuously for months is a sign of danger should have been arrested in the first place.
The most senior tech people in your organization can install malware as easily as protect from it.
— Duke Leto (@dukeleto) August 27, 2020
Furthermore, this negligence shows that the monitoring system at ShapeShift is not as good as expected as Azamat has been stealing Bitcoin daily for months. Fortunately, this company found the culprit before he spent all their money and disappeared.
thanks for the update, and agreed, non-custodial services are the only way! Setting aside *user funds* were not at risk, obviously controls for employees to steal *company* funds were sub-optimal and I am sure being greatly increased as we speak
— Duke Leto (@dukeleto) August 28, 2020
Meanwhile, Erik Vorhees, founder of ShapeShift, has countered that all user funds on the ShapeShift fund are stored in a secure wallet with a well-designed feature.
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