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© 2019 Anthony Davian Cleveland, Ohio 

hedge fund manager Cleveland and hedge fund manager Akron

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Nicehash Founder Indicted

According to an indictment unsealed late last week, four hackers are being charged with a whole host of crimes ranging from racketeering, conspiracy, bank fraud, wire fraud, and so on.


For those of you unfamiliar with Nicehash and its owner, Matjaz Skorjanc, I will do my best to get you caught up. Skorjanc has a checkered past to say the least. He served 4 years and 10 months for masterminding the Mariposa botnet scheme. After he was released he came up with the idea of Nicehash, a bitcoin-mining marketplace.

Nicehash allows users to buy and sell mining hashing power. Miners are those computers that help secure the blockchain by confirming transactions and in return are rewarded for their work (known as a block reward). Right now, a Bitcoin miner earns 12.5 Bitcoin for every block that they confirm (scheduled to be cut in half in less than a year), which is significant money given each Bitcoin is currently worth $7900 USD.


In 2017 Nicehash was supposedly hacked, losing some 4,700 Bitcoins, which were worth $56MM USD at the time. Given the latest details of this new indictment the entire Nicehash hack is now suspect. Did Skorjanc hack his own company?


If Nicehash was making the money it was thought to be making, why would the founder be out hacking around for such small amounts? Sad to say, I think the hack of Nicehash in 2017 should turn the focus back on to Skorjanc. Who would / could hack his own system better than the person who created said system.


As for Skorjanc and some of the others on the indictment, they are currently on the run and have not been arrested, although arrest warrants have been issued for them. The only person currently in custody is Thomas McCormick, aka fubar, of Washington State. He has been in federal custody since December 10, 2018 when he was arrested at the FBI's Washington Field Office in Washington DC. Given my extreme understanding of the federal system, I am willing to bet Thomas McCormick is providing information about the others (snitching) for a 5k reduction.

There is not doubt about the power of a prosecutors' 5k1.1 motion. Just look at the sweetheart deals Jordan Belfort and Sam Antar were able to sing for. I will keep a close eye this situation as it plays out.



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