Hackers hack pretend bank for virtual money

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What sort of world are we heading for?   The people who have been running a bank with the pretend “Bitcoin” money have been robbed.  By hackers.

Hackers have stolen more than $5 million in virtual currency from Bitstamp, a major bitcoin exchange, forcing the company to freeze user accounts, suspend trades and block deposits.

The Slovenia-based company said that fraudsters made off with 19,000 bitcoins a day before being found out, Fortune reports.

It was not immediately clear who was responsible for the theft or how it happened.

Bitstamp CEO Nejc Kodrič has said that his company will assume liability for all bitcoins lost prior to its warning today.

Remind me again why hackers are just harmless and their crimes victimless?  

Bitstamp has previously said that it tries to keep up to 90% of its funds on hard drives, known in bitcoin jargon as ‘cold storage,’ that are off the grid and therefore harder to hack into.

This attack appears to have targeted the remaining 10-15% that is stored on servers in a data centre.

They trust their own technology so much, they store the ‘serial numbers’ of bitcoins on harddrives that are locked away and remotely inaccessible.

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The problem with online security is that in the whole world, there has to be just one person smarter than anyone you hired, and what you did to protect yourself counts for nothing.

These crimes are untraceable.  They span jurisdictions that won’t even talk let alone cooperate together.

Amusingly, the whole idea behind Bitcoin was distrust of the establishment by geeky anti-government techie types, and now they have turned on themselves.

Yesterday it was a journalist’s emails and private conversations.  Or celebrity photos.   Or embarrassing emails from company execs.  Today, they are stealing $5M in real money, albeit from a virtual source.

A lot needs to change in our attitudes towards this before any of us can feel even remotely protected.

And at the same time, you have the likes of Russel Norman trying to stop our Government from tooling itself up to protect us by undermining each and every step the security services try to make.   The Luddite cites privacy as a reason.   He doesn’t get it.  At all.

Norman is scared of his own Government, and seems to have no concerns about anybody else.   Isn’t that just plain weird?

Or is it consistent?

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– One News

 


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  • kiwihornplayer

    Why does KDC immediately come to mind upon reading this article?

  • john Doe

    I don’t understand “virtual money”, but I keep getting the feeling that Russel Norman has something to hide.

    • mommadog

      That was my thought as well. Until I can walk into a store and make a purchase with “virtual money”, it probably wont make sense to me. I’m just not sure what you do with it other than money trading – buy some, sell some, try to make a virtual profit. As for Russel – I do wonder what he has to hide and he still hasn’t told us what he was doing / talking about / arranging when he visited KDC.

  • cows4me

    When we finally get that cashless society there’s a fairly good chance we really will be cashless.This must be deeply embarrassing for those pushing bit-coin, looks like it’s back to the drawing board.

    • KinaRolf

      Sweden has already a nearly cashless society because the fascist (really and truly, not joking) government want to keep track of and supervise the people to control them down to the single cent. The banks love it as they make indecent profits out of it, and the criminals love it too, the frauds has increased 10 fold and more.

  • Korau

    $5 million stolen. Chickenfeed.

    Mt Gox lost $460 million in bitcoins to hackers (probably) and another $27.4 million from it’s bank accounts.. See http://www.wired.com/2014/03/bitcoin-exchange/ for the inside story.

    “This was the second time the exchange was hacked. In June 2011, attackers lifted the equivalent of $8.75 million.”

    Cam’s statement above about there needing to be someone smarter than your it guy is borne out in this case…

    “But on the inside, according to some who were there, Mt. Gox was a messy combination of poor management, neglect, and raw inexperience.”

    • KinaRolf

      There are still some idiots out there who have not discovered encryption. Encryption is the equivalent of a safe. If you have a million dollars I am sure you just don’t leave it lying around on the front porch.

  • Randy Thaddeus Prosepon

    Good points, but consider this. How much money has been stolen from ‘real world’ banks by someone with a bigger gun than you?

    • andrew carrot

      Just ask Mastercard

      • KinaRolf

        Try the tax people

  • KinaRolf

    Bitcoin is a first experiment, but it show the way how we win the future can control and avoid the Tax mad politicians and bureaucrats. The next version of Bitcoin need to have ties into major currencies and a reincarnation system.

  • TSD

    The reason Russel is scared of Government powers is because he believes the Govt must be using them as HE would.

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