Bitcoin core developer loses nearly $3.5 million in BTC, Changpeng Zhao of Binance offers help

Bitcoin core developer Luke Dashjr informed users encryption program key was leaked and nearly $3.5 million in Bitcoin stolen.
Changpeng Zhao, CEO of Binance offered help and said exchange platform will monitor and freeze stolen tokens.
CZ has previously cautioned users against self custody and highlighted associated challenges as Bitcoin core failed to manage his key.

Bitcoin core developer Luke Dashjr lost access to his crypto encryption key, termed PGP key, and nearly 200 BTC tokens were stolen. The CEO of the world’s largest exchange by trade volume, Changpeng Zhao (CZ) offered help and said his team will monitor and freeze the stolen tokens if they hit the trading platform.

Also read: Robert Kiyosaki scoops up Bitcoin before crypto regulations crush innovation

Bitcoin core developer loses PGP key, Changpeng Zhao proposes solution

Bitcoin core developer Luke Dashjr informed his 55,600 followers on Twitter that his PGP key has been compromised and his BTC tokens have been stolen. A PGP key is a public encryption key. When a user creates a PGP key, a keypair with a public and private key is generated.

Dashjr explained that a PGP key is used to verify that a Bitcoin Knots or Core download isn't infested with malware. The developer warned users against downloading Bitcoin knots until the issue is resolved. If downloaded, the system needs to be shut down to prevent loss of BTC holdings.

The BTC core developer asked the US Federal Bureau of Investigation in his tweet.

PSA: My PGP key is compromised, and at least many of my bitcoins stolen. I have no idea how. Help please. #Bitcoin
— @[email protected] on Mastodon (@LukeDashjr) January 1, 2023

Binance’s CZ acknowledged Dashjr’s loss and assured that his team will monitor the trading platform and freeze any stolen tokens.

Sorry to see you lose so much. Informed our security team to monitor. If it comes our way, we will freeze it. If there is anything else we can help with, please let us know. We deal with these often, and have Law Enforcement (LE) relationships worldwide.
— CZ Binance (@cz_binance) January 1, 2023

Dashjr lost all his Bitcoin, nearly 200 BTC worth $3.5 million as a result of the incident. CZ has criticized self-custody, where a crypto user takes sole possession of their wallet's private keys instead of trusting them to an exchange, since the massive outflows prompted by fear of contagion after the collapse of FTX last November. The Binance CEO pointed out the challenges of self-custody and said:

Sad to see even an OG #Bitcoin Core Developer lost 200+ BTC ($3.5 million). Self custody [has] a different set of risks.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.