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Bit-heist: Over $1mn in bitcoins stolen from Australian online bank

Published time: November 08, 2013 07:24
Edited time: November 10, 2013 12:44
Reuters / Jim Urquhart

Reuters / Jim Urquhart

An Australian bitcoin bank holding over US$1 million of the crypto-currency has been hacked, leaving an unknown number of users with nothing – one of the largest thefts in the currency’s four-year history.

The incident took place on October 26, when the bank was hacked, with 4,100 bitcoins valued at $1.3 million stolen, the service’s operator only known as ‘Tradefortress’ said. He refused to give his name to the press, also stressing he was not much older than 18.

It took the bank’s owner two weeks to notify the affected customers.

Bitcoin is a decentralized, crypto-currency, free from any government or central bank control. Currency is sold and bought at online exchanges, and those transactions can be virtually anonymous.

One bitcoin is currently worth more than $300 on Mt. Gox, the world’s largest bitcoin exchange - up from around $50 in March. There are 11,925,700 million bitcoins in circulation.

The Sydney man offered the service called Inputs.io, which he claimed was "one of the most secure web wallets on the market." Customers were charged a small fee to keep their bitcoins there.

The site used two-factor authentication and location-based email confirmation, and said the page was started to avert "the hack of bitcoins even if the web server was compromised."

Some of the hacked money is to be refunded, the operator told Fairfax Media. Tradefortress said he would use 1,000 of his own bitcoins, as well as the money the hackers didn’t steal.

"Users are being repaid up to 100 percent depending on the amount (sliding scale), generally 40-75 percent," Tradefortress said.

The operator indicated the attack was possible due to “a flaw” in the system which allowed the hackers to bypass the protection.

Currently, there’s a sad face emoticon posted online and a notice that reads "I know this doesn't mean much, but I'm sorry, and saying that I'm very sad that this happened is an understatement."

screenshot from https://inputs.io/

The response to the incident has been varied, with some users accusing Tradefortress of making up the whole hacking story to steal their money. He denies the accusation.

Customer Marco Martoccia tweeted (@sheet_metal) that he had lost 4 bitcoins as part of the heist, worth about $1,200. He said he was planning to use bitcoins as a part of the deposit for a house.

Specialists point to a lack of regulation as the main problem with the currency.

"The users of Inputs.io were trusting a random person with their money rather than in the real world when you're dealing with cash, where you trust banks to look after your money," Ty Miller, director of Australian IT security firm Threat Intelligence, told Fairfax Media.

He recommended storing coins with a strong password on a device not connected to the internet, using hard-drive encryption and antivirus protection.

A spokesman for the Australian Federal Police said to his knowledge, a theft of bitcoins has never been investigated at either a federal or state level.

The operator stated that he is not planning to address police with the matter.

Comments (31)

 

Pan_a_sonic 14.11.2013 20:12

Please I live in Australia and we are free from crime, well I am deluding myself. lol I think the reporter got us mixed up Austria. For those people who lost some of their wealth, I hope the universe will balance things out, and I hope that you will double your wealth in the future. There are penny stocks that can deliver plenty of bang for your buck, buy in the valleys and short the peak of the mountain.

 

Abinico Warez 09.11.2013 23:09

Ha, ha, ha - still happy with bitcoin - this type of theft is designed into the bitcoin system - said it before and say it again, bitcoin is a fake, fraud, and a scam. Want coin, get something real like Maple Leaf, Austrian, American Eagle, etc. You have to be stupid, stupid, stupid to have anything to do with bitcoin.

 

Zeitgeisttt 09.11.2013 00:50

Scott Mexico-Frazier 09.11.2013 00:04

My bet is that the "heist" was made by US and/or UK government. They have the most to benefit, and great tech department to pull it off. US wants Bitcoin gone....why not destroy their credibility, by say...... heisting them?

  


My bet most to benefit is the Rothchild gang/banksters

View all comments (31)
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