Four scammers wanted for conducting double spending attacks in Bitcoin ATMs from major cities in Canada. Taking advantage of this, the men spent Bitcoin in exchange for cash, to an amount totaling almost $200,000.
Yesterday, Toronto police issued a statement requesting public help to locate four men suspected of carrying out a string of Bitcoin BTC scams across Canada. The attacks carried out by four men, entail 112 transactions.
Calgary Police say officers received information in October 2018 about multiple fraudulent transactions made across the country that specifically targetted one Canadian bitcoin company. Each suspect operated in a different city.
The men's identities are still unknown, therefor the Calgary police made a decision to turn to the public to ask for help in identifying the criminals. People can also anonymously submit tips through Crime Stoppers.
Police say the suspects were committing "double-spend" attacks - a type of fraud where someone withdraws money from a Bitcoin kiosk before remotely cancelling the transaction before the Bitcoin company can process the transaction.
Much of the blame has been laid at tools like replace-by-fee from Bitcoin Core developer Peter Todd, which could have enabled these zero-confirmation transactions. While it was not created to facilitate theft, the tool lets "stuck" transactions to become released for the cost of an extra fee. The goal of 0-conf is to create instantaneous transactions for instances when the 10-minute Bitcoin transaction throughput time would not be convenient. The first pays the specified amount to the specified address.
The second suspect is believed to be responsible for transactions that occurred in Calgary.
0-conf transactions are instantaneous; once the transaction is sent to the Bitcoin mempool, it is deemed completed despite the fact that miners haven't yet "mined" a block containing the transaction.
"Authorities believe the individuals have n-depth knowledge or interest in cryptocurrency, bitcoin and/or blockchain technology".
Bitcoin ATMs have been growing in number across the world, with over 4,000 already in operation. These ATMs are owned by several companies including Bitnational, Bitcoin Solutions, and Bitcoiniacs, with some of them having daily sales limit of up to $9000.