Celebgate Could Inspire More Bitcoin Blackmail

September 2, 2014

The Celebgate incident is still unfolding, and we are already seeing mainstream media report on the connection between the “nude celebrity photos” and Bitcoin. The original leaker of the pictures returned to 4chan recently to respond to the uproar he had caused. An excerpt from his post highlights Bitcoin’s involvement in Celebgate:

People wanted **** for free. Sure, I got $120 with my bitcoin address, but when you consider how much time was put into acquiring this stuff (i’m not the hacker, just a collector), and the money (i paid a lot via Bitcoin as well to get certain sets when this stuff was being privately traded Friday/Saturday) I really didn’t get close to what I was hoping.

The leaker used bitcoins to purchase the nude photos of 100+ celebrities from the hacker. The leaker went on to explain that as he was posting he started noticing tell-tale signs that his computer actions were being watched and tracked. He further claimed that his “ISP kept cutting out” and that there were “Weird emails coming in..” The FBI is currently investigating both the leaker and the hacker, whom might have used an iCloud exploit.


Bitcoin – The Superior Currency to Use for Blackmail?

The hardest part of blackmail is the transaction; at least, that’s what I’ve been told my entire life by countless Hollywood movies. The authorities always end up getting involved, and the money never ends up where it is supposed to. For better or for worse, Bitcoin allows blackmailers to receive funds that cannot be frozen or reversed by conventional methods. For this same reason, cash is usually preferred in blackmail transactions (briefcases full, according to the movies); however, the necessity to physically move said cash always provides for a vulnerability. For Bitcoin blackmail, certain obstacles are removed; however, others are not.

Bitcoin Blackmail Doesn’t Make You Invulnerable – The Mitt Romney Case

In the height of the 2012 American presidential election campaign season, Mitt Romney became a victim of Bitcoin blackmail. The blackmailer sent letters to Tennessee campaign offices of both the Republican and Democratic parties and the offices of Mitt Romney’s hired accounting firm, PricewaterhouseCooper LLC. The ransom note was also posted on Pastebin, a popular website for text-only posts of a dubious nature.

The blackmailer claimed to have stolen a copy of Mitt Romney’s 2010 tax return, a document that Mitt Romney had previously refused to make public due to personal qualms about revealing the size of his foreign holdings. The letters specified two Bitcoin addresses: one for those that wanted to see the document and one for those that wanted it to remain secret. The first Bitcoin address to receive one million USD worth of bitcoins would determine the fate of the tax return, which was never proven to be real. Needless to say, neither Bitcoin address received much financial attention.

This particular incident ended with the charging of one Michael Mancil Brown, a Nashville resident, in 2013. He was charged with six counts of extortion and six counts of wire fraud by a federal grand jury after a lengthy investigation involving the Secret Service. The FBI claims that a picture of a cat recovered from a USB drive sent with the letters helped identify the suspect.

Very honestly, blackmailers only use Bitcoin because it is a superior medium of exchange. However, those (ab)users that think Bitcoin blackmail will afford them complete anonymity have been proven wrong time and time again.

Bitcoin and Blackmailing

Celebgate is an ongoing internet phenomenon of epic proportions. Bitcoin’s role in the Celebgate incident is going to shed mainstream media light on yet another shady use of Bitcoin. The use of Bitcoin in blackmailing has been on the rise since Bitcoin’s creation several years ago. Though it seems that no parties involved tried to outright blackmail the celebrities with their pictures, it is clear that if either the Celebgate hacker or the free leaker were inclined to go that route, Bitcoin would have been the only currency accepted.

Images from Shutterstock.

Last modified (UTC): September 2, 2014 11:41

Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.