zlacker

>>mikeyo+(OP)
> “After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein,” the press release said. “Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure.”

So most likely,

1) they didn't launder it properly, leading to police being able to trace it to their bank accounts. I wonder if tornado.cash was used.

2) then police had their names, leading to warrants for all online accounts - google account, apple account, etc.

3) they made the big blunder of keeping their private keys in their online account. Most likely a txt file in google drive. That is such a silly blunder. Without the private keys, the police has zero proof of anything. They could have made a hundred excuses for how they got money in their bank account, as long as the police didn't have the private keys. Who keeps their private keys in an online account?

Apparently the biggest criminals make too many silly mistakes. The old saying applies here: "you don't have to be smart, just don't be an idiot"

>>Alexan+Ub
Well, the police had a search warrant, so the police could have found them if they had had them in their possession anyway.

Sure, they could have destroyed them, losing the money but maybe not getting arrested?

>>tsimio+zf
When a few billion is at stake, you think they'd make the effort to memorize the keys. Or at least encrypt them.

>>BobbyJ+xg
The file the feds found had 2,000 addresses - so there's a non-trivial amount of 12 word phrases to remember.

>>nerdwa+Ni
you would only need to memorize one seed to spawn infinite key pairs

>>paulpa+Kj
can you elaborate? I find this very interesting. We can't choose which private key we get.

So is it possible for 1 seed to generate all of them? Doesn't that break information theory (Shannon's compression limit)?

>>Alexan+2o
Just to clarify: the statement is not that you could encode those existing 2000 private keys with one short seed (you cannot, indeed), but rather that you could easily and safely generate 2000 distinct private keys from one relatively short seed.