Bitmain Sues Alleged Bitcoin Thief in US Federal Court

Crypto mining hardware maker Bitmain has filed suit against an anonymous thief in a US federal court.

In a complaint submitted to the U.S. District Court, Western District of Washington at Seattle, Bitmain alleges that the unidentified thief stole 617 bitcoin from an account it holds at crypto exchange Binance, and is seeking a jury trial for damages.

According to the filing, the “as-yet-to-be identified ‘John Doe’” stole the bitcoin holdings on April 22, 2018 from its account. With a single bitcoin valued at $8,935 at the time, the company is claiming that it is owed more than $5.5 million in damages.

Bitmain claims that the thief used the bitcoin in its Binance wallet to buy MANA – a crypto asset used as part of the Decentraland project – “at a price that was far above the going market rate.”

The thief also allegedly created a purchase order for ether using Bitmain’s BTC wallet, before making another purchase order for MANA using Bitmain’s ETH.

At the same time, the attacker created a sell order with their existing MANA wallet, allowing them to trade Bitmain’s BTC for their MANA “at a correspondingly inflated price,” adding:

“Upon information and belief, Binance’s automated system matched the deflated MANA sell order with the deflated MANA purchase order and executed the trade and John Doe obtained significant gains—at the expense of Bitmain. As a result, John Doe benefitted twice from transferring MANA into and out of Bitmain’s digital wallet.”

Jurisdiction

The complaint filing in Seattle, Washington, has to do with the fact that the alleged thief is said to have utilized an account they held with crypto exchange Bittrex. The lawsuit alleges that the MANA the thief used in the transaction was originally stored in a Bittrex wallet, and Bittrex is based out of Washington.

Moreover, “after John Doe had completed his/her theft of BTC from Bitmain, he/she transferred that BTC out of the John Doe’s Binance wallet and ultimately into a digital wallet on the Bittrex cryptocurrency trading platform.”

The lawsuit is therefore claiming that the Washington court has jurisdiction over the matter based on the Computer Fraud and Abuse Act, the Washington Cybercrime Act and other computer fraud laws.

The court may also have jurisdiction depending on the thief’s identity, the filing stated.

While Binance and Bittrex are named in the suit as the institutions providing accounts for Bitmain and the John Doe, neither are parties to the suit, meaning they are not being sued and are not suing.

An attorney for Bitmain declined to comment when reached.

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