ShapeShift Former Employee Stole $900K In BTC From Firm’s Accounts

A Shapeshift former employee managed to steal about $900,000 from the company’s accounts and now the company has filed a civil action against the employee of the engineering team so let’s read more in today’s Bitcoin scam news.

Azamat Mukhiddinov, a Shapeshift former employee who worked as a senior software engineer since 2018, was accused to have installed an illicit program that drained Bitcoin from the company’s corporate accounts to an external, private wallet. The act was committed between November 2019 and May 2020 according to the documents. Azmat stole 90 Bitcoins during the time but he was eventually caught after ShapeShift used a “tremendous amount of its internal and external resources” to catch the culprit.

Azamat was confronted by ShapeShift on May 25 and he admitted to the theft. He also confessed to having already spent some of the stolen funds and he converted them to US dollars:

 “Eventually, Azamat returned, in one form or another, all of the $900,000 in bitcoin he had stolen.”

The company is now seeing restitution for the drained funds and the funds that were spent while trying to track Azamat down. The company said its employees had to rewrite the code and secure the company’s software and also “undertake thorough remediation of the Company’s computer networks, software, and infrastructure” to justify the amount:

 “In total, ShapeShift’s costs and expenses relating to the investigation of Azamat’s theft and the repair of its effects totaled tens of thousands of dollars, if not more.”

The most senior tech people in your organization can install malware as easily as protect from it.

How can you ensure employees won't steal all the #bitcoin ?@ShapeShift_io was taking duffle bags of cash as repayment 🤣

Not your keys, not your coins.https://t.co/NnwMjX4imm pic.twitter.com/kACokZaWCl

— Duke Leto (@dukeleto) August 27, 2020

Johnatan “Duke” Leto, the founder of the privacy protocol Hush and the software security engineer said that the act of an employee stealing 0.5 Bitcoin daily for months was a huge red flag that should have been caught immediately. he added that the crime shows ShapeShift has very little backend monitoring because Azamat was stealing every day for a few months. The company was lucky to find him before he “emptied all their funds and disappeared.”

Hi there Duke. The $5k was a mis-statement of CoinDesk, they've since corrected.

More importantly, ShapeShift is non-custodial. No user funds were ever at risk. Users are protected by design.

— Erik Voorhees (@ErikVoorhees) August 27, 2020

In the meantime, Erik Vorhees, the founder of Shapeshift weighed in with Leto’s statements, saying that all user funds on Shapeshift funds are stored in non-custodial wallets and that security feature has been implemented by design.

As in the other Shapeshift news, the new platform is aiming at becoming a direct rival to custodians such as Coinbase for ease of use and other features – all while giving the users full control of their private keys. The new ShapeShift platform was described by the founder and CEO of the company Erik Voorhees as one that “offers many services that a company like Coinbase would provide but on ShapeShift it’s done in a much more secure and self-sovereign way.”