Behind the Million-Dollar Bitcoin Hack

Hackers swiped more than $1 million worth of Bitcoins from 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, BitcoinEUs creators describe it as cash for the Internet.

In a message simply headlined, EU:(,EU the company said the hacks left 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.

EUDatabase access was also obtained, however passwords are securely stored and are hashed on the client,EU the company said. EUBitcoin backend code were transferred to 10; (most likely another compromised server).EU

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.

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

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.

EUThis attracts some serious criminal talent,EU he said. EUIf 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.EU

Trade Fortress isnEUt taking it...

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