2021-12-16 10:50:37

Christmas Dogecoin Heist: How crypto hackers stole millions in ‘perfect crime’ on Dec 25

T’was the night before Christmas, and all through the house, not a creature was stirring… except for some dastardly cyber criminals.

In 2013, just as innocent people around the world were waking up to open their presents, wily hackers had already opened theirs: 30 million Dogecoins, stolen from right under the noses of the ‘joke’ cryptocurrency‘s creators and early backers.

Presents were nicked, nerds were in tears and Christmas was cancelled during what was supposed to be the most wonderful time of the year.

Where the anonymous criminals are today, nobody can say for certain. All we know is that they successfully made off with “the big score”: around £4 million pounds worth of Dogecoin.

So how did these digital Grinches get away with the biggest crypto cold case of all time? Who were their victims? And could the hackers strike again and ruin yet another Crimbo?

Let’s take a look back at the truly Scroogetastic tale of the Great Dogecoin Christmas Heist.

Christmas was cancelled for thousands of innocent dog-themed crypto enthusiasts

What is Dogecoin?

Like Bitcoin or Ethereum, Dogecoin (aka DOGE) is a cryptocurrency: a digital ‘currency’ that can be bought, sold, traded and stored in digital ‘wallets’ like real money but with no banks involved. It is these ‘wallets’ which were eventually targeted by hackers in the Christmas heist.

Created in 2013 by software engineers Billy Markus and Jackson Palmer, Dogecoin was originally intended as a joke. It was supposed to parody Bitcoin and, using a ‘shiba inu’ meme that was widespread at the time, introduce new people to the world of cryptocurrencies in a friendly (and much cheaper) way.

Dogecoin started off as a 'joke' based on the shiba inu meme - but became very real very quickly
Dogecoin started off as a ‘joke’ based on the shiba inu meme – but became very real very quickly

However, Dogecoin very quickly took on a life of its own. In 2021 alone, Dogecoin increased in value by around 12,000 percent, meaning those who got onboard early have had the chance to make a lot of quick cash.

This has been aided by the likes of Elon Musk who has publicly supported the cryptocurrency and even said Tesla cars will one day accept it as payment.

Like all cryptocurrencies though, it’s a risky and volatile investment—as early investors in DOGE (who are known as ‘Shibes’, named after the dog meme) quickly learned on that fateful Christmas morning.

The crypto crime of the century and stealing Grandma’s Christmas cash

It was around 10AM on Christmas Day when the first reports of a Dogecoin hack came out.

“Looks like somebody hacked and cleared my Dogewallet some minutes ago with a single transaction, I lost more than [one million]!, wrote a user on the Dogecoin official forum.

At first, people offered him advice, but other comments quickly followed indicating they had lost thousands to the same hacker. “This just happened to me from the same address”, said one person, referring to the account that had taken the money. This job went much further than one petty theft.

It's not the first time dogs have ruined Christmas
It’s not the first time dogs have ruined Christmas

The hackers couldn’t have picked a worse day. One victim said that Christmas was “a rough time for me, [I] was in the hospital losing my mom to cancer only to login and find my million coins missing from dogewallet. Black eye indeed.”

Others had ploughed their Christmas gifts into the new cryptocurrency hours before, only to lose it straight away. “Spent grandma’s Christmas money on 60k Doges. Gone within the hour. Much sad,” wrote one victim of the scam.

Victims quickly began accusing the owners of Dogewallet – the Dogecoin storage service that first got hacked – of pulling a scam. “What if the [Dogewallet] owners just f***ed us over? I mean, there isn’t any real information on the person running it and the guy from the email account can’t be found in a Google search,” wrote one trader.

Cybercriminals landed a big score worth £4 million today - just by hacking one website
Cybercriminals landed a big score worth £4 million today – just by hacking one website

However, this was no scam. It turned out that Dogewallet had been directly hacked to send all transactions to one anonymous account. Shortly after, another Dogecoin wallet, Instant Dogenet, was hit by the same group.

The owners of Dogewallet put out a public apology and were forced to spend their Christmas Days in front of computer screens desperately trying to compensate the victims of the hack.

Who was behind the Dogecoin Christmas heist?

They say there’s no such thing as the perfect crime, but whoever was behind the Dogemas hack vanished into thin air.

Around 30 million Dogecoin were stolen in total. While it was only worth about £9000 at the time, if the hackers have held onto it since then, they’re now real-world millionaires thanks to the crypto’s booming value.

Soon after the hack, Dogecoin investors began cooking up plots to track down the culprit(s). “Couldn’t we identify hackers / thieves and follow the stolen Doge?”, asked one investor.

The hackers were never caught - and could still be at large
The hackers were never caught – and could still be at large

They reasoned that, as Dogecoin exists on the blockchain which keeps a digital ‘ledger’ record of all transactions, it must be possible to follow the money. “If it can be done technically, I’ll do it myself,” the Redditor wrote.

Sadly, Dogecoin transactions, like other cryptocurrencies that use a ‘blockchain’, are encrypted and anonymous. In other words, the hackers used the power of Dogecoin against itself. They were never found.

“Save Dogemas”: how the community saved the day

With no way of tracking down the hackers, Dogecoin fans had only one trick left up their sleeves: the Christmas spirit.

The online community started a crowdfunder to compensate victims of the heist.

The crowdfunders said: “We need your help! Dogemas is a magical time, but the hacking of Dogewallet and Instadoge ruined many shibes’ holiday.”

“[…]In order to reach the moon we have to take care of each other and keep the spirit of community and faith in each other and the services that help spread the love of dogecoin.”

They quickly raised enough funds to put everything right. One donation came in at 1.5 million Dogecoins – which today is worth about £192,400 pounds.

SIPA USA via PA Images In this photo illustration, a Dogecoin sign of a cryptocurrency is seen on a smartphone screen with a Binance logo of a cryptocurrency exchange in the background. (Photo by Pavlo Gonchar / SOPA Images/Sipa USA)
You can steal people’s presents, but you can’t steal the magic of Christmas

It set a trend for the Dogecoin community, which has since funded the Jamaican bobsled team’s trip to the Winter Olympics, donated to dog rescue charities, and paid for clean drinking water in Kenya.

While the hackers could still be out there, possibly even preparing for one last big job this very Christmas, they didn’t succeed in breaking Dogecoin.

They proved that, while you can steal people’s presents, you can’t steal Christmas.

Because Dogecoins are for life – not just for Christmas.

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