Man who hired foreign hackers to extort Bitcoin was sentenced to three years in prison

Due to financial constraints, Pan, a staff member of a network security company, hired Russian hackers to attack three large domestic websites and sent emails to the staff of the three companies to extort a large amount of Bitcoin. Recently, Pan was sentenced to three years in prison and a fine of RMB 5,000 by the Haidian Court for the crime of extortion. This is also the first case in Beijing where hackers illegally attacked network companies and extorted Bitcoin.

According to Pan, due to financial constraints, he began to think of using DDOS attacks to extort Bitcoin in July 2016. He then contacted Russian hackers through the Internet on August 1, 4, and 10 to launch DDOS traffic attacks on three large domestic trading websites.

After being attacked by DDOS, the three websites all experienced problems such as the inability to start the client, the website transaction system was paralyzed, and users could not access the website normally. At the same time, the staff of the companies where the three websites were located received voice-changing calls and anonymous emails. In the phone calls and emails, the other party claimed that they were conducting a so-called "stress test" on these websites. If they wanted to end the attack, they had to pay a certain amount of bitcoins to a fixed address, otherwise the attack would continue and the website would continue to be unable to log in normally.

Although the victim companies hired security companies to conduct defense analysis on the traffic attack launched by Pan, the two websites attacked in advance were unable to withstand the attack. The websites were paralyzed for many consecutive days, resulting in a large number of user complaints. The two companies were forced to pay 22 and 44 bitcoins to the address designated by Pan, causing a total economic loss of more than 230,000 yuan to the two companies. The third attacked website did not pay the extortion bitcoins and reported to the police in time.

It is understood that during the trial of this case, although Pan pleaded guilty, he repeatedly stated to the collegial panel that because price departments at all levels have not reached a price determination conclusion for Bitcoin, the exchange rate of Bitcoin is entirely determined by each trading platform itself. Therefore, the Bitcoin he extorted should not be considered to have corresponding property attribute value, and his sentence should not be determined based on this value.

In response, the case handler retrieved all the transaction bills of the two victim units for purchasing bitcoins and verified that the victim units spent a total of RMB 234,961.52 to purchase these bitcoins. Finally, after trial, the Haidian Court sentenced Pan to three years in prison and a fine of RMB 5,000 for the crime of extortion.

Text/Reporter Li Tiezhu and Correspondent Bai Lei