Loses $1 Million In Bitcoin Hack

Posted Nov 10, 2013

Bitcoin has been hacked again!  Over $1 million has been stolen from digital wallet service, is a way for users to store and use Bitcoins.  TradeFortress, an anonymous Australian user on the website, said that there were two separate attacks in late October that resulted in a loss of around 4,100 BTC.

The hacker used social engineering to compromise a chain of e-mail accounts that eventually allowed the attacker to reset the password for the Linode server that hosted the website.  Most likely, the people that used the website to store Bitcoins will not see their money again.  Connecting identifiers with the users of Bitcoins is almost impossible and there is no such thing as chargebacks in the digital currency. Once transactions are made, nothing further happens.

Security experts highly recommend keeping Bitcoins in a safe deposit box offline.  Some users have accused the Australian man of being the person behind stealing the Bitcoins himself, but in an interview with Wired he said that he is going to repay with all of his personal Bitcoins along with the remaining cold storage coins on Inputs.  This amounts up to 1540 BTC.

“I know this doesn?t mean much, but I?m sorry, and saying that I?m very sad that this happened is an understatement,” said the man.