The aim of this article is a general PSA about wallet security and to delve a little bit deeper into some blockchain forensics. The cases provided are real and have occurred on the Gridcoin blockchain, the people in question will remain unnamed.

Overview

So recently there have been cases where Gridcoin has been stolen from members of the community. There have only been two cases that are official so far and I want to go in depth on how to keep your computer safe and simply document these events in case my information may be helpful in the future. If you have any information about the transactions or have ever dealt with any addresses that are featured here, your information is valuable and comments here are well appreciated. If there is any new information comes in, I will update it accordingly.

Case 1: 70k GRC stolen 6th of February 2019

Transaction ID: 7bd3b716bb69cb201f03875d5f8eccebd5fc801f21660ad83f582f1cb507d9ee (view on block explorer)

Offender's address: S997pMdQ7L9KyjXQUsaZyXjVxYEscGxdht (view on block explorer)

Timeline of transactions

6th Feb - Offender transferred GRC to their wallet. This has a high chance of being an exchange wallet given it has only one output (with all funds) and outputs to another high chance exchange wallet and a regular user. 14th Mar - TX out of wallet occurred

S7yqiY9AaenNKwAPvF8QbzNWCYXgEQeUpT - 29.1k GRC

SGEAXhp9iSWWjTF95nWudfzx2BvxFmMLgk - 40.8k GRC

As for the S7 address, this seems to be an exchange wallet. This is because the transaction chain goes on and on, spending only small chunks to crunchers and investors.

The SGE address is a little bit more interesting, it (as of posting this) contains 85.5k GRC in an investor wallet which has not staked ever but has transactions dating back years. It is likely that this person was a buyer from an exchange that listed GRC at the time.

Price action during this period does not provide any additional information considering an increase of only 0.0004 USD. Therefore we cannot make any conclusions on the reason for the delay between transactions 1 and 2.

Brief description of the cause

Wallet left fully unlocked

VNC (remote desktop) software was running and open publicly

Case 2: 522k GRC stolen January 2nd 2020

Transaction ID: 4396a95cf0a0a906b939e1e4851803ae5dd0cca68ee979426c154f0123d33ada (view on block explorer)

Offender's addresses:

SE5Ry6eSzs5tifV5qFfMWVn9wfZRHhzGhe (view on block explorer)

S9531rB4TzcAfevud15AbWEzUvGLpaMant (view on block explorer)

Offender's IP address was logged, geoIP indicates that it originates from the Netherlands.

Timeline of transactions

2nd Jan - Offender transferred GRC to their wallet. 5th Jan - Offender staked. Unlucky that the wallet is not tied to a CPID. 5th Jan - Offender spent the staked GRC (transaction) 5th Jan - Offender spent 2 of the 10 staked GRC (transaction, related address: SLo9arnZaQiAnvjsdoQ7WAuoGcRit7yYQg )

The interesting thing with this case is that none of the addresses appear to be exchange addresses. For the future, studying the actions of the address in action 4 might yield some interesting information if the offender decides to move such funds.

Brief description of cause

Wallet was thought to have been unlocked for staking only (no confirmation if it was unlocked fully)

Remote desktop software was running on the user's machine

How to keep yourself safe

It is clear from these experiences that Remote Desktop Protocols (RDP) and related software have been to blame. This is software that allows you to remotely connect to your computer over the internet. Some examples include VNC, Teamviewer and Google's Chrome Remote Desktop.

So the key concept to learn from here is to never store Gridcoins (or cryptocurrency) on the same computer with RDP enabled.

Here is a video I made describing how to keep your Gridcoin wallet secure...

The following are some basic security steps, most of which are also mentioned in the video:

ALWAYS keep your wallet open for STAKING ONLY. This is an option whenever you click the unlock button for your wallet. Make sure the box is always checked. This ensures that you can still stake but your funds cannot move from your addresses. If you have to set your wallet to fully unlocked for any reason, make sure you switch it back soon and not leave it unattended.

Choose a strong password at least 10 characters long. The longer and more complex the password, the less of a chance a brute-force attack can be successful.

Backup your wallets and config regularly onto at least one other device. This reduces your chance of losing your funds from loss or damage on a physical level. To backup your Gridcoin wallet click File > Backup wallet/config...

Don't store large amounts of funds on a computer you use every day. This computer being used daily is more susceptible to viruses and unexpected damage.

Stay safe out there!