The 15-year-old boy who stole 24 million dollars in cryptocurrency | science & tech

Clyde Barrow first struck at age 16. He borrowed a used car from a dealership outside of Dallas and “forgot” to return it. Alphonse “Al” Capone participated in the robbery of a Brooklyn store at 19, his first crime, which secured him the meager amount of just over 10 dollars. Precocious criminals? Perhaps, but wait until you read this. At just 15 years old, Ellis Pinsky, a teenager of Russian descent who was raised in a middle-class home in Irvington, New York, stole the equivalent of 24 million dollars in cryptocurrency. It was not his first cybercrime, but it was his largest and most profitable one.

He did it on the afternoon of January 7, 2018. It was a bloodless coup, a treacherous and youthfully audacious crime. The technological equivalent of tunneling through a vault and breaking into a maximum-security safe. Pinsky thinks it was easy and a lot of fun. But he adds that he wishes he hadn’t done it because it has made life for him and his family hell.

Two years after his crime, in May 2020, the young New Yorker almost died. In the wee hours of the morning, four intruders broke into the home he shared with his mother, stepfather, and three younger siblings. They wore ski masks and thick overcoats and wielded brass knuckles, butcher’s knives and a fake 9mm pistol. Their presence was caught on security cameras and a broken window set off the burglar alarm.

Pinsky had taken precautions. For months, he’d assumed that something like this would happen, so he bought a shotgun on the black market. With the help of his mother, he confronted the two assailants who remained upstairs. When they fled, he cornered the two who had gone into the basement and he called the police.

Pinsky tells the story as if it were a Tarantino movie, but he also acknowledges that he knew that he was risking his life. Although he had taken target practice, when push came to shove, he found that he lacked the skill and cold-bloodedness needed to handle a shotgun. Luckily, the intruders turned out not to be true professionals. The two burglars who were arrested were Dominic Pineda and Shon Morgan, 21-year-old petty thieves who had recently arrived from Virginia. Pinsky thinks he knows who sent them, although he is careful not to say, and he has no doubt what they were looking for: the remaining loot, money that by then, 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 whom the New York press has nicknamed Baby Al Capone. The interview was published on July 8, and it attests to how much more sophisticated and unusual cybercrime has become in recent years.

Morris says that it took him several weeks to gain Pinsky’s trust. He describes Ellis as “a child who has just grown into a young adult whose anxiety eats away at him.” The reporter and the precocious criminal had several meetings on the terrace of the university campus where he went to school. Ultimately, Pinsky agreed to tell him “the whole truth” on the condition that the journalist not leave out any important details in his article: “I want the world to know my side of the story, and it is not simple. You have to tell it well.”

Pinsky’s story is that of a perfectly normal child. He’s the son of migrants from the former Soviet Union. The family lived in New York City until they moved to Irvington, a sleepy commuter town on the Hudson River, when Ellis was 11 years old. In his new suburban residence, the chubby and somewhat shy—but by no means socially awkward—boy, grew fond of online video games such as Counterstrike other Call of Duty. He then started spending time with a young community of would-be hackers that hang out in “gamer” environments. Veteran hackers who had noticed his progress began to share what they knew with him in exchange for him performing modest, and not always legal, tasks for them. Pinsky engaged in acts of what is referred to as “social engineering,” that is, extracting passwords or professional credentials from workers at social networks or from key computer services in order to access other people’s computers. It is a coarse and effective espionage technique. For instance: someone boasts in an online chat that he works as a trainee programmer at Twitter or Microsoft and can access a series of user accounts or cell phones; you show interest, gain his trust and get him to tell you what he can actually do or how it is done.

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

The perfect heist?

Then Baby Al Capone entered the cybercrime big leagues. One day, a guy named Harry contacted Ellis to tell him that someone he knew from the OGusers online community, which is very popular among hackers, 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 informer, they gained control of Terpin’s SIM card. As soon as they began to explore, they saw that they had landed a whale. They could even check his crypto asset portfolio balances; doing so confirmed that the billionaire had 900 million dollars in Ethereum cryptocurrency (Terpin denies that claim), but they could not access the money.

Looking for access to less-secure asset portfolios, they found a company called Counterparty where Terpin had more than three million Triggers, an emerging cryptocurrency that Pinsky had never even heard of. They thought the triggers would be worth just a few thousand dollars, but simply looking at the virtual currency price showed that they were actually worth 24 million dollars.

After hacking Terpin’s twelve-word password, they took control of his portfolio. At that point, Pinsky made the rookie mistake that would later allow Terpin to track him down: he transferred some of the cryptocurrency to his own 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 began to make dozens of transactions to help them launder the money by exchanging it for bitcoins and transferring it through different servers before depositing it into a new account. Pinsky says that several million dollars were lost in this transaction. Because Terpin had accumulated ten percent of all existing Triggers, selling so many of them at once caused the currency’s price to plummet in real time; Pinsky’s accomplices had held up their end of the bargain. Except for a certain @erupts, who received a transfer of a million dollars and decided to keep it.

Patek Philippe and Louis Vuitton

After splitting the spoils with Harry, Ellis ended up with several million dollars in checking the account his parents had opened for him to start saving for college. He went to bed early because he had gym class the next day. What followed is an even more unlikely and twisted story. It took Pinsky several weeks to realize that he had just become the richest teenager in New York state and that the FBI could bust through his front door at any moment.

He was not aware that he had stolen a fortune, only that he had pulled a childish prank, the real dimensions of which he did not fully appreciate. Pinsky says that he barely touched the money, but he does concede that 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 Journalist Daniel Kucher has compiled evidence that Ellis was not as discreet as he claims that the teenager indulged in nouveau-riche whims like driving around Irvington behind the wheel of an Audi R8. His schoolmates also say that he started wearing Louis Vuitton clothes; traveled to Miami and Las Vegas using JetSmarter, a private airplane rental service; and once ended an argument at a school football game by telling his rival: “I could buy and sell you and your whole family. I have 100 million dollars.”

The fact is that there’s no material evidence of any of this. Perhaps the only sure sign that Ellis lived the high life during the last years of his life as a minor is a social media photo of him surrounded by three blonde models with whom he’s sharing a huge bottle of champagne. It is a sad photo. Pinsky has the expression of a frightened child. He’s holding the bottle as if it were a dangerous animal while the young women smile and stick their tongues out at the camera.

But even that photo has an unexpected subtext. Pinsky says that @erupts—in real life, Nick Truglia, the 20-year-old hacker who had stolen a million dollars from him—had invited Ellis to a private party at a New York club, hired the models, and paid for the champagne. As he tells it, Ellis went to the meeting with a friend, convinced that he was heading into the lion’s den and expecting that Truglia was going to break his legs. But it turned out that Truglia just wanted to get to know him a little better, tell him that he was a legend, and talk “business.” Pinsky also says that he returned to Irvington at dawn in an Uber feeling like the protagonist of a delirious movie farce, a kind of juvenile version of The Wolf of Wall Street.

Too old to die young

Ultimately, Terpin filed a lawsuit in 2020 against the teenager who had stolen from him two years earlier. Ellis found himself a good lawyer, pleaded guilty to embezzlement and, as a show of good faith, returned 562 bitcoins, the Patek watch, and just under $100,000 in cash, which he had been keeping in a piggy bank under his bed. The authorities went easy on him. After all, at the time of the events he was only 15 years old, and a cybercriminal is not an armed robber.

His mother has supported him steadfastly throughout the ordeal. Pinsky asserts that she never suspected anything, that she has always been oblivious to her little Al Capone’s shady dealings (despite the Audi R8, the rental of private jets, and the Louis Vuitton shirts). In chronicling 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 house; in 2021, he spent a semester studying abroad in Florence. Morris has no doubt that Pinsky will do very well in life. Ellis is talented and driven. Moreover, his past is not an obstacle in the interconnected fields where he intends to make his living, technology and business; it’s actually quite the opposite.

Morris sees Pinsky as consumed by the premature melancholy of someone who has gone through too much too soon. That May night, as he went down to the basement clutching the shotgun with which he planned to protect his family from a gang of hired thieves, Pinsky believed he was about to die before he turned 18. Cryptocurrencies, and their rampant and wild volatility, have not only brought us a generation of new-fangled speculators, but also criminals as unlikely as Ellis Pinsky.

Leave a Reply

%d bloggers like this: