Bitpoint Cryptocurrency Exchange Hacked For $32 Million (zdnet.com) 55
Japan-based cryptocurrency exchange Bitpoint announced it lost 3.5 billion yen (roughly $32 million) worth of cryptocurrency assets after a hack that happened late yesterday, July 11. From a report: The exchange suspended all deposits and withdrawals this morning to investigate the hack, it said in a press release. In a more detailed document released by RemixPoint, the legal entity behind Bitpoint, the company said that hackers stole funds from both of its "hot" and "cold" wallets. This suggests the exchange's network was thoroughly compromised. Hot wallets are used to store funds for current transactions, while the cold wallets are offline devices storing emergency and long-term funds. Bitpoint reported the attackers stole funds in five cryptocurrencies, including Bitcoin, Bitcoin Cash, Litecoin, Ripple, and Ethereal. The exchange said it detected the hack because of errors related to the remittance of Ripple funds to customers. Twenty-seven minutes after detecting the errors, Bitpoint admins realized they had been hacked, and three hours later, they discovered thefts from other cryptocurrency assets.
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Inside Job? (Score:3)
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There is a high chance, it's an inside job.
My first thought, as well.
So who is on the hook for the losses . . . ? If my bank says, "We got robbed, and you money is gone", I'd have some very frank words for them.
If it was a governmental regulated bank, maybe some bank insurance would cover the losses. Or maybe even the bank's private insurance.
But given that cryptocurrency is still a legal gray area . . . I think that the customers are out of luck here.
Re: Inside Job? (Score:2)
If it was a US Bank, it would be insured to $250k through bank premiums to the FDIC (Federal Depositors Insurance Corporation). Basically, the Fed.
Bitcoin in and of itself has no such structure, but I assume an insurance company would write you a policy if you so wished it, and were willing to foot the premiums.
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FDIC is only if the bank goes under from the mismanagement of funds/credit crunches/idiots at the bank investing your money in tulips/etc. FDIC does not deal with theft [wikipedia.org].
Re: Inside Job? (Score:2)
The bank is obligated to produce your deposits upon request. If it can not it is insolvent, which may be due to theft. In that case, the FDIC will absolutely step in and write you a check for up to $250k to ensure you get your deposits back.
Re: Inside Job? (Score:2)
It's not really a matter of it being a legal gray area. No matter what the law says, there's no way to compel someone to magically recreate Bitcoins.
The laws of math trump the laws of man.
Re: Inside Job? (Score:2)
And you think an exchange has cash on hand equal to its cryptocurrency holdings?
This isn't like the play money governments issue. Fractional reserves don't work. You would need to have more than 100% cash reserves to make this at all possible.
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^This.
Bitcoin Users: Banks are evil! We want infinite privacy! No one should be able to track what we spend our money on! Governments just want to control our money!
Also Bitcoin Users: My cryptocoins are gone! Where are my government and industry safeguards! What do you mean I can't find where my money went and get it back!
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The last two exchanges in Japan that got hacked had to pay back their customers. The financial regulator over there forced them to.
You keep using that word... (Score:3)
the company said that hackers stole funds from both of its "hot" and "cold" wallets.
You keep using words like "cold" and "offline", I don't think those words mean what you think they mean...
I don't get why people repeatedly don't seem to get that "offline" really needs to be off line - as in not on the network, as in requires human interaction to access.
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Re: You keep using that word... (Score:2)
There certainly is now.
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the company said that hackers stole funds from both of its "hot" and "cold" wallets.
You keep using words like "cold" ....I don't think those words mean what you think they mean...
Their IT manager brought it up in a meeting, and the CEO told them no, it would cost too much money to crank up the AC a little more and why couldn't they just use a mini fridge like the one he has in his office.
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The thing is: It's the exchanges (or online services) that are being hacked. Not personal Bitcoin wallets. It's like the difference between you getting held up personally and having the local bank robbed. But Bitcoin exchanges don't offer the same levels of service that a bank does. No regulatory oversight or deposit insurance. So aside from facilitating speculation, the only thing exchanges do is to provide a central location for thieves to exploit.
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We can do without exchanges...
You can buy Bitcoin and take possession of it (in the form of the crypto token). This will expose you to the hacked exchange for the few milliseconds that the transaction is underway. And then you can buy stuff with your Bitcoin.
Sort of like cashing your paycheck at the bank.
This was not a hack... (Score:1)
Explain to me how an hacker can gain access to a cold wallet compromising the company network. This was not an hacking operation. Someone stole the cash, someone who can access the cold wallet.
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Explain to me how an hacker can gain access to a cold wallet compromising the company network..
Perhaps the cold wallet wasn't actually cold.
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