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A quarter million US$ looted from Bitcoin exchange

by Mark Tyson on 5 September 2012, 10:30

Quick Link: HEXUS.net/qablvz

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On Monday evening (US time) hackers gained access to BitFloor, the Bitcoin currency exchange, and stole the equivalent of US$248,000. The Bitcoins were stolen using information garnered from an unencrypted backup of wallet keys. In reaction to the heist BitFloor founder Roman Shtylman has suspended BitFloor exchange operations so that the currency cannot be used at this time. Also Mr Shtylman quickly revealed details of the breach and appealed for help on the Bitcoin user’s forum.

“Last night, a few of our servers were compromised. As a result, the attacker gained accesses to an unencrypted backup of the wallet keys (the actual keys live in an encrypted area). Using these keys they were able to transfer the coins. This attack took the vast majority of the coins BitFloor was holding on hand. As a result, I have paused all exchange operations. Even tho only a small majority of the coins are ever in use at any time, I felt it inappropriate to continue operating not having the capability to cover all account balances for BTC at the time.”

The slightly tarnished silver lining in this cloud currency is that “I still have all of the logs for accounts, trades, transfers. I know exactly how much each user currently has in their account for both USD and BTC. No records were lost in this attack,” according to Mr Shtylman. Later on in reply to a user on the forum he added “And all records for the current status of the exchange (accounts, trades, etc) are all also secure”.


Bitcoin stated out in 2009, it is a peer-to-peer electronic crypto-currency. Currently one Bitcoin is worth $10.46. Read more about the technology on the Bitcoin wiki page.

Unfortunately for Bitcoin and its users the platform has an extensive history of thefts, scams and hacks. A thread kept up to date and including this latest theft is maintained on the Bitcoin discussion forums.



HEXUS Forums :: 7 Comments

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I cannot believe they are even admitting to lax security…..glad I never got into it now (was holding off waiting to see how it panned out) and it's going to put me off any other schemes like it.
I'm kind of surprised that Switzerland (or more realistically, some country that would like to be the new Switzerland) hasn't tried to set up its own non-traceable currency with backing.

Something like bullion vault (to buy credits, gold is bought and held in a secure location - it could be currency but it'd have to be a reliable one, so gold would be more secure) and are given the credits. The credits can be traded anonymously online/internationally a la bitcoin. The value of the credit is then guaranteed as at any point, the holder of a credit could cash out against the gold/currency held as the marker from when the credit was issued (in reality, this would be selling the credit to a new user. The big difference is, if you are the last person using this currency, it still has worth). Yes the overall flow could be tracked (who bought credits and who cashed them in), though no more than as with bitcoin. Trades with credits only would remain invisible.

as for the ‘mining’ aspect if required, a distributed computing program could be used. Credits (or the gold/currency to create more new credits)could be bought by companies wishing to borrow processing power based on the otherwise idle time of users computers. These new credits could then be distributed based on the user's contribution to the distributed computing projects (or similar - I'm sure they'd be welcome to new ideas - the point is that the credit-generating task would be doing something of worth itself, and that worth would be directly added to the currency in proportion to the new currency created - hence countering inflation. The link/risk to the price would then be limited to the market value of whatever currency or commodity the virtual currency was secured against).
shaithis
I cannot believe they are even admitting to lax security…..glad I never got into it now (was holding off waiting to see how it panned out) and it's going to put me off any other schemes like it.

Not much point hiding it once you've been compromised I guess.

Bitcoin itself is awesome, it's the exchanges that are the weak link sadly :(
Seems to be any net currency is doomed

Anyone remember Beenz?
Tpyo
I'm kind of surprised that Switzerland (or more realistically, some country that would like to be the new Switzerland) hasn't tried to set up its own non-traceable currency with backing.

I'm sure I read Switzerland has had to hand over it's secret financial records to the Fed or the IMF now? Some large, dodgy body anyway.

I'm sure the exchanges will be strengthened after this. About time too. At least the government isnt forcing us all to pay them for failure.