Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Network Security
Next Generation Data Center Is Here!
Average Rating:
Rate this article:  
Behind the Million-Dollar Bitcoin Hack
Behind the Million-Dollar Bitcoin Hack

By Jennifer LeClaire
November 8, 2013 12:41PM

    Bookmark and Share
Putting a wallet that size on the Internet is like dropping your own wallet in Times Square and thinking your money will be there when you return hours later. Someone with that much money in Bitcoins should take appropriate security precautions. But, yeah. Sorry bro. A fool and his Bitcoins are easily parted, said security expert Ken Pickering.
 


Hackers swiped more than $1 million worth of Bitcoins from Inputs.io. The site owner, which goes by the public-facing name TradeFortress, waited weeks to tell its customers about the theft of 4,100 Bitcoins in two separate hack attacks.

Bitcoin is the network behind a new payment system that lets you use digital money. It is the first user-powered, decentralized, peer-to-peer payment network with no central authority or middlemen. From a user perspective, Bitcoin’s creators describe it as cash for the Internet.

In a message simply headlined, “:(,” the company said the hacks left Inputs.io unable to pay user balances. Apparently, the hacker broke into the hosting account through compromised e-mail accounts. The attacker was able to bypass 2FA due to a flaw on the server host side, according to the company.

“Database access was also obtained, however passwords are securely stored and are hashed on the client,” the company said. “Bitcoin backend code were transferred to 10;15Hd@mastersearching.com:mercedes49@69.85.88.31 (most likely another compromised server).”

Prepare to Get Robbed

We turned to Matthew Bergin, a senior security consultant at security firm CORE Security, to get his reaction to the theft. He told us, plain and simply, that this is what TradeFortress gets for storing Bitcoins on a system connected to the Internet.

“There are several other options for storing Bitcoins that are much safer,” he said. “That's a lesson learned the hard way, but at least it has been learned.”

Tommy Chin, a technical support engineer at CORE Security, told us Bitcoin transactions are irreversible by design. In other words, there are no 30-day return or exchange policies.

“This attracts some serious criminal talent,” he said. “If you use Bitcoins, be prepared to get robbed no matter how much security you implement. By design, this system gives smart people easy methods to take someone else's money.”

Trade Fortress isn’t taking it lightly. Consumers who store more than one Bitcoin are invited to send e-mails to the company with a Bitcoin address, preferably an offline, open source light or SPV wallet like Multibit or Electrum. That doesn’t do anything about the coins folks lost, but could secure coins in the digital bank.

“I know this doesn't mean much, but I'm sorry, and saying that I'm very sad that this happened is an understatement,” the company said.

The Wallet Metaphor

Ken Pickering, director of engineering at CORE Security, told us the anonymity of Bitcoins makes them about as traceable as cash by default, and therefore as easy to steal as cash.

“The wallet metaphor is an accurate one. If someone gains access to your physical wallet without your knowledge, they can do much of the same thing. Putting a wallet that size on the open Internet is like dropping your own wallet in the center of Times Square and thinking somehow all your money will be there when you return hours later,” Pickering said.

“Someone with that much money in Bitcoins should take appropriate security precautions. But, yeah. Sorry bro. A fool and his Bitcoins are easily parted,” he added.
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Network Security
1.   Microsoft Ruling Raises Privacy Concern
2.   Twitter Buys Password Manager Mitro
3.   Gov't User Data Requests Skyrocket
4.   Retailers Hacked by New Malware
5.   IBM Beefs Up Identity Intelligence


advertisement
Twitter Buys Password Manager Mitro
Startup to release code as open source.
Average Rating:
Gov't User Data Requests Skyrocket
Twitter: From U.S. and around the globe.
Average Rating:
IBM Beefs Up Identity Intelligence
To offer biz better security products.
Average Rating:


advertisement
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Ruling Against Microsoft Raises E-Mail Privacy Concern
Microsoft has been ordered to hand over e-mails to law enforcers in the United States as part of a criminal investigation, even though the e-mail is stored at a data center in Dublin,Ireland.
 
Twitter Buys Password Manager Startup Mitro
Following on the heels of another acquisition earlier this week, Twitter is adding to its fold a password-manager security startup called Mitro, which in turn is releasing its code as open source.
 
Government Requests for Customer Data Skyrocket
Requests for customer data from the government jumped 50 percent in the first half of 2014, according to Twitter, which received more than 2,000 requests for user info from gov't agencies.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.