Newsletters
The Enterprise Security Supersite NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Please click for more information, or scroll down to pass the ad, or Close Ad.
Home Network Security Viruses & Malware Hackers Security Solutions More Topics...
Eliminate costly downtime!
Find out how with Free White Paper
& enter to win a Samsung Galaxy Note

www.apc.com
Network Security
Fiercely productive scanners
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.   Michaels: Nearly 3M Cards Breached
2.   Heartbleed Could Cost Millions
3.   Google Street View Unravels CAPTCHAs
4.   Teen Arrested for Heartbleed Hack
5.   IBM Adds Disaster Recovery to SoftLayer


advertisement
Michaels: Nearly 3M Cards Breached
But the hack has been contained.
Average Rating:
Heartbleed Could Cost Millions
But it could have been prevented.
Average Rating:
Don't Reset Passwords for Heartbleed?
Added caution needed to ensure security.
Average Rating:


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

Network Security Spotlight
Michaels Says Nearly 3M Credit, Debit Cards Breached
Arts and crafts retail giant Michaels Stores has confirmed that a data breach at its POS terminals from May 2013 to Jan. 2014 may have exposed nearly 3 million customer credit and debit cards.
 
Heartbleed Could Cost Millions, Could Have Been Prevented
Early estimates of Heartbleed’s cost to enterprises are running in the millions. The reason: revoking all the SSL certificates the bug leaked will come at a very hefty price.
 
Google's Street View Software Unravels CAPTCHAs
The latest software Google uses for its Street View cars to read street numbers in images for Google Maps works so well that it also solves CAPTCHAs, those puzzles designed to defeat bots.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
Google Glass may find its first markets in verticals in which hands-free access to data is a boon. Medicine is among the most prominent of those, as seen in a number of Glass experiments under way.
 

Mobile Technology Spotlight
Google Releases Chrome Remote Desktop App for Android
You're out on a sales call, and use your Android mobile device to grab a file you have back at the office on your desktop. That's a bit easier now with Google's Chrome Remote Desktop app for Android.
 
Amazon 3D Smartphone Pics Leaked
E-commerce giant Amazon is reportedly set to launch a smartphone after years of development. Photos of the phone, which may feature a unique 3D interface, were leaked by tech pub BGR.
 
Zebra Tech Buys Motorola Enterprise for $3.45B
Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 billion, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal.
 

Navigation
Enterprise Security Today
Home/Top News | Network Security | Viruses & Malware | Hackers | Security Solutions | Mobile Security | Disaster Recovery | Windows Security
Data Security | EST 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 | XML/RSS Feed

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.