The 15-Year-Old Boy Who Stole $ 24 Million in Cryptocurrency | Science and technology

Clyde Barrow first struck at the age of 16. He borrowed a used car from a dealership outside Dallas and “forgot” to return it. Alphonse “Al” Capone was a 19-year-old participant in a Brooklyn store robbery, his first crime, which secured him a meager sum of just over $ 10. Early offenders? Maybe, but wait until you read this. At just 15, Ellis Pinsky, a Russian-born teenager who grew up in a middle-class home in Irvington, New York, stole the equivalent of $ 24 million worth of cryptocurrency. It wasn’t his first cybercrime, but it was his biggest and most profitable.

He did so on the afternoon of January 7, 2018. It was a bloodless coup, a treacherous and daring crime in his youth. The technological equivalent of digging into a vault and breaking into a high-security vault. Pinsky thinks it was easy and a lot of fun. But he adds that he wishes he hadn’t because it made life hell for him and his family.

Two years after the crime, in May 2020, the young New Yorker almost died. Early in the morning, four intruders broke into the house he shared with his mother, stepfather and three younger siblings. They wore thick balaclavas and coats and wielded brass knuckles, butcher knives and a 9mm fake pistol. Their presence was captured by security cameras and a broken window set off the burglar alarm.

Pinsky had taken precautions. For months he had thought something like this would happen, so he bought a shotgun on the black market. With his mother’s help, he confronted the two remaining attackers upstairs. When they fled, he cornered the two who had entered the basement and called the police.

Pinsky tells the story as if it were a Tarantino movie, but also acknowledges that he knew he was risking his life. Although he had practiced target practice, when the thrust came, he found that he lacked the skill and coolness needed to wield a rifle. Fortunately, the intruders turned out not to be true professionals. The two thieves who were arrested were Dominic Pineda and Shon Morgan, 21-year-old thieves who recently arrived from Virginia. Pinsky thinks he knows who sent them, even though he is careful not to say it, and he has no doubts about what they were looking for: the leftover loot, money that by now, he says, he no longer had.

A thief’s diary

Alex Morris, the editor of Rolling Stone magazine, was the first to get an in-depth interview with Ellis Pinsky, the cyber thief the New York press dubbed Baby Al Capone. The interview was published on July 8 and attests to how much more sophisticated and unusual cybercrime has become in recent years.

Morris says it took him several weeks to gain Pinsky’s trust. He describes Ellis as “a child who has just become a young adult whose anguish devours him”. The reporter and the precocious criminal have had several meetings on the terrace of the university campus where he attends school. In the end, Pinsky agreed to tell him “the whole truth” on the condition that the reporter didn’t leave out any important details in his article: “I want the world to know my side of the story, and it’s not easy. You have to say it well ”.

Pinsky’s story is that of a perfectly normal child. He is the son of migrants from the former Soviet Union. The family lived in New York until they moved to Irvington, a sleepy commuter town on the Hudson River, when Ellis was 11. In his new suburban residence, the chubby and a little shy, but not at all socially awkward boy, got hooked on online video games like Counterattack And call of Duty. He then began spending time with a young community of aspiring hackers who frequent “gamer” circles. Veteran hackers who had noticed his progress began sharing what they knew with him in exchange for him performing modest and not always legal tasks for them. Pinsky has engaged in acts of what is called “social engineering,” that is, extracting passwords or professional credentials from social network workers or key computer services to access other people’s computers. It is a crude and effective spying technique. For example: someone brags in an online chat that they work as a trainee programmer on Twitter or Microsoft and can log into a variety of user accounts or cell phones; you show interest, earn their trust, and get them to tell you what they can actually do or how it’s done.

Pinsky was natural in this task, but he was interested in “true knowledge and true power”. At 15, this brilliant self-taught man believed he was “capable of doing it hack any account and any device. He had taken “social engineering” to a new level by creating a network of collaborators and accomplices to whom he paid small sums to help him in his increasingly complex misdeeds. “Why do we climb the mountains?” asked British mountaineer George Mallory. “Because I’m there.” Pinsky was hacking other people’s devices for very similar reasons: simply because he could.

The perfect shot?

Then Baby Al Capone joined the big names in cybercrime. One day, a guy named Harry contacted Ellis to tell him that someone he knew from the popular OGusers online community had offered to sell access to users’ passwords for a service that buys and sells cryptocurrency. .

Harry and Ellis identified a potential victim from the client database: Michael Terpin, a businessman in his 60s who was on the verge of becoming a billionaire. With the help of an anonymous informant, they gained control of Terpin’s SIM card. As soon as they started exploring, they saw that they had landed a whale. They might even check the balances of his cryptocurrency wallet; in doing so he confirmed that the billionaire had $ 900 million in Ethereum cryptocurrency (Terpin denies this claim), but they could not access the money.

Looking for access to less secure portfolios of assets, they found a company called Counterparty in which Terpin had more than three million Triggers, an emerging cryptocurrency that Pinsky had never heard of. They thought the Triggers were only worth a few thousand dollars, but just looking at the price of the virtual currency showed that they were actually worth $ 24 million.

After breaking Terpin’s twelve-word password, they took control of his wallet. At that point, Pinsky made the rookie mistake that would later allow Terpin to track him: he transferred some of the cryptocurrency to his account to make sure it was real money.

As soon as Pinsky confirmed that his balance reflected the new deposit, he and Harry mobilized their network of accomplices. They started doing dozens of transactions to help them launder money by exchanging it for bitcoin and transferring it across multiple servers before depositing it into a new account. Pinsky claims that several million dollars were lost in this transaction. Since Terpin had accumulated ten percent of all existing Triggers, selling so many at once caused the currency price to plummet in real time; Pinsky’s accomplices had kept their side of the bargain. Except for one @erupts, who got a million dollar transfer and decided to keep it.

Patek Philippe and Louis Vuitton

After splitting the loot with Harry, Ellis found himself with several million dollars in the checking account his parents opened for him to start saving for college. He went to bed early because he was having gym class the next day. What followed is an even more unlikely and convoluted story. It took Pinsky several weeks to realize that he had just become the richest teenager in the state of New York and that the FBI could break down his front door at any time.

He did not realize he had stolen a fortune, only that he had made a childish joke, of which he did not fully appreciate the real size. Pinsky says he barely touched the money, but admits he bought a Patek Philippe watch for $ 50,000, which he paid for in bitcoin, and spent another $ 900 on flights from Chicago to New York for his entire family.

SoMagNews reporter Daniel Kucher has gathered evidence that Ellis was not as discreet as he claims, that the teenager indulged in nouveau-rich whims like driving for Irvington behind the wheel of an Audi R8. His schoolmates also say he started wearing Louis Vuitton clothes; he traveled to Miami and Las Vegas using JetSmarter, a private jet charter service; and he once ended an argument at a school football game by saying to his rival, “I could buy and sell you and your whole family. I have $ 100 million. “

The fact is, there is no material proof of any of this. Perhaps the only sure sign that Ellis lived a social life during the last few years of her underage life is a photo of her on social media surrounded by three blonde models with whom she is sharing a huge bottle of champagne. It is a sad photo. Pinsky has the expression of a frightened child. He holds the bottle as if he is a dangerous animal as the young women smile and stick their tongues towards the camera.

But even that photo has an unexpected subtext. Pinsky says @erupts – in real life, Nick Truglia, the 20-year-old hacker who stole a million dollars from him – had invited Ellis to a private party at a New York club, hired the models, and paid for Champagne. As he recounts, Ellis went to meet a friend, convinced that he was heading to the lions’ den and expecting Truglia to break his legs. But it turned out that Truglia just wanted to get to know him a little better, tell him he was a legend and talk about “business”. Pinsky also says he returned to Irvington at dawn in an Uber feeling like the protagonist of a delusional film farce, a kind of youthful version of The Wolf of Wall Street.

Too old to die young

Eventually, Terpin filed a lawsuit in 2020 against the teenager he had stolen from him two years earlier. Ellis found himself a good lawyer, pleaded guilty to embezzlement and, in good faith, returned 562 bitcoins, the Patek watch and just under $ 100,000 in cash, which he had kept in a piggy bank under his bed. of him. The authorities have done well with him. After all, he was only 15 at the time, and a cybercriminal is not an armed robber.

His mother supported him constantly throughout the ordeal. Pinsky claims that she has never suspected anything, that she has always been oblivious to the shady business of her baby Al Capone (despite the Audi R8, the private jet rental and the Louis Vuitton T-shirts). In recounting his conversations with Pinsky, Morris makes it clear that he believes the boy has become a pathological liar, that he is hiding too sordid a story and has too much to lose by telling the whole truth. Currently, Pinsky is studying computer science and economics at a college near his mother’s home; in 2021 he spent a semester studying abroad in Florence. Morris has no doubts that Pinsky will do very well in her life. Ellis is talented and motivated. Furthermore, his past of him is not a hindrance in the interconnected fields in which he intends to earn a living, technology and business; in reality it is quite the opposite.

Morris sees Pinsky as consumed by the premature melancholy of someone who has lived too much too soon. That May night, as he descended into the basement holding the rifle with which he intended to protect his family from a gang of hired thieves, Pinsky believed he was going to die before he turned 18. Cryptocurrencies, and their rampant and wild volatility, have not only brought us a generation of new speculators, but also unlikely criminals like Ellis Pinsky.

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