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An Israeli man has accused his roommate of stealing 74,990.74 Dash (around $9 million USD currently) or 0.85% of the current circulating supply from his wallet last month.
The accuser, Yarmolenko, who has been an early investor in cryptocurrencies, said in the indictment document that he taught the suspect, Zard, about cryptocurrencies over the years. Allegedly, Zard had unencumbered access to the apartment and Yarmolenko’s room and laptop, which he used to transfer the Dash to his own four wallet addresses. The indictment specifically names Zard in committing “theft in aggravated circumstances, money laundering and penetration of a computer to commit an offense”.
The victim previously reached out to the Dash community asking for help in retrieving his funds. Luckily, the Dash community was able to point him in the right direction to authorities so he was not left alone trying to figure out a solution, which also speaks to the benefits of having a supportive community like Dash.
Cryptocurrency meshing with current legal framework
Many cryptocurrency hacks can be difficult to track down and even if the hacker’s cryptocurrency address can be found, it can be even more difficult to link the address to an individual’s identity, not to mention actually prosecuting if they are in a different country. This case is different in that the suspect was the alleged victim’s roommate and after being identified could be brought to court in the same jurisdiction. Thus, the case has the opportunity to set interesting precedent for future cryptocurrency lawsuits and cases. First, it sets up the procedure of reporting the theft to the local authorities whom can investigate the theft in an attempt to track down the thief. However, the bigger precedent could be utilizing private keys in a court of law as evidence. While the Yarmolenko alleges the coins were his and stolen, it is just his word against Zard’s word until he proves the Dash were sent from his wallet to Zard’s wallets without his consent by revealing his private keys and matching them to the wallets.
The event also brings attention to properly securing funds since cryptocurrency gives more freedom to individuals, but also puts more responsibility on individuals to secure their wealth. A good practice is storing any amount of significant funds across multiple hardware and paper wallets that have different private keys so if one wallet is ever compromised then it does not mean complete financial doom for the victim. A similar practice is already commonly seen in the current financial world when anyone having more than $250,000 USD storing it in multiple ownership categories and/or multiple bank accounts since the FDIC will only insure “$250,000 per depositor, per FDIC-insured bank, per ownership category”.
The theft also brings to mind the advantages of multi-sig wallets so even if a single private key is compromised, then there are other private keys and individuals that must be compromised for the would-be theft to gain access to the funds. This not only becomes more important as wealth increases, but also for larger institutions that will play a major role in mass adoption. For example, Crowdnode, the masternode sharing service, utilizes multiple signature wallets so even if one of the founders is compromised, then all of their users’ funds are not immediately at risk.
Dash pioneering to make cryptocurrency mainstream
Dash wants to be everyday digital cash and is working hard to mesh Dash with current societal norms to achieve faster adoption. First, Dash Core Group is working on Evolution to give consumers easy-to-use features like usernames and contact lists, which will hopefully allow users to focus more on securing their wealth rather than figuring out how to use basic functions. Additionally, Dash has created a trust and trust protectors so the Dash Core Group can actually be held responsible by Dash masternodes rather than relying solely on good faith operations. The Dash treasury has also been able to fund community outreach groups to help educate consumers about responsible and safe cryptocurrency ownership to minimize user-error losses. These features help Dash align with the real world, which is an easier path to achieve mass adoption rather than attempting to change consumers’ behaviors and change what they trust.