Last Updated: 2019-01-18 23:05:32 UTC
by John Bambenek (Version: 1)
We've gotten a few reports of the latest round of sextortion emails demanding bitcoin in exchange for deleting incriminating videos. These emails and wallets have piled up for some time. Usually the criminal doesn't move the bitcoin immediately, so checking the bitcoin wallet isn't helpful. But a week or so after such emails are sent, it becomes possible to see what miscreants are doing with their ill-gotten gains. So for this, I took an e-mail I received on Jan 8th, "Your account is being used by another person" that listed bitcoin wallet 1GjZSJnpU4AfTS8vmre6rx7eQgeMUq8VYr as the place to send money to protect "my little secret".
The first thing to realize about bitcoin is that you have good enough anonymity... as long as you stay in the blockchain. Bitcoin is very decentralized. What isn't at all decentralized is the places where you can turn your fake anarchist digital money into real money. So they key in these kind of investigations is to find what they do with their cryptocurrency to get investigative leads. Sometimes those leads involve finding wallets that are discussed publicly or on forums (i.e. how I track neonazi cryptocurrency online), sometimes it could be just finding where to send the subpoena.
With the wallet above, it has earned about $12,000 for spamming planet earth with these extortion threats. The wallet itself is part of a cluster of 5 addresses, all linked to similar scams (17YKd1iJBxu616JEVo15PsXvk1mnQyEFVt, 18Pt4B7Rz7Wf491FGQHPsfDeKRqnkyrMo6, 1G1qFoadiDxa7zTvppSMJhJi63tNUL3cy7, 1PH5CYMeD4ZLTZ2ZYnGLFmQRjnptyLNqcf) which you can research at Bitcoin abuse which is making tracking this much easier.
There are lots of tentacles of where these coins end up. Some end up cashed out at LocalBitcoins.com but the intrigued transaction happened yesterday with an approximately $12,000 transaction into a Binance wallet (transaction here).
The inputs to these criminals are commodity bitcoin exchanges as well, and it might be helpful if those reputable exchanges simply prohibit any transaction with these wallets. That said, knowing where the money is coming out provides leads to investigations looking to bring these actors to justice. I've been estimating these scams are making about $100,000 a week or so, but much more work needs to be done to aggregate all the abusive wallets and then attribute them to specific actors or groups.
If you see these scams, please report them to BitcoinAbuse.com to allow researchers and investigators to have that data for more correlation.
bambenek \at\ gmail /dot/ com
If you have more information or corrections regarding our diary, please share.