Hacker Steals $1M from Australian Bitcoin Bank (VIDEOS)

Hackers had successfully entered into the system of payments processor Inputs.io from a four-month-old Australian Bitcoin bank and stole over $1 million. The hacking incident is estimated to have taken place between Oct 23 and 26.

The report said the hackers took off with all 4,100 Bitcoins from the wallet service worth about $1.3 billion. The theft once more raises questions on the viability, stability and security of Bitcoins as a currency.

YouTube/saleem jabbar

The owner of the TradeFortress, the Bitcoin bank, wrote, quoted by The Guardian, said, "The attacker compromised the hosting account through compromising email accounts (some very old and without phone numbers attached, so it was easy to reset). The attacker was able to bypass 2FA due to a flaw on the server host side."

The Sydney Morning Herald said TradeFortress is owned by a young Sydney man who offered the wallet service using the Web site Inputs.io, which is a domain listed to someone in Water Street, Hornsby, New South Wales.

Prior to the hacking incident, TradeFortress claimed it is one of the most secure web wallets in the markets by using two-factor authentication and location-based email confirmation.

But with the hacking, even the owner had warned users, "I don't recommend storing any Bitcoins accessible on computers connected to the internet." He promised to try to refund some of the stolen money with over 1,000 Bitcoins that he owns.

Some are being repaid up to 100 per cent, depending on the amount involved, although the usual repayment rate ranges from 40 to 75 per cent. The repayment has exhausted his supply of Bitcoins, and he is aware his Bitcoin bank could lose clients as customers lose trust in his vaunted secure system.

" It think that's likely - we haven't seen any extremely sophisticated Bitcoin malware, however advanced malware that infects the computer you use to send [Bitcoins] can steal [them] from external hard drives [and the] browser," the owner said.

He said he would not report the incident to the police because of extremely limited action they could take on the theft.

YouTube/Conspirafied0

Bitcoins are decentralised, crypto-currency that is not under any government or central bank control and usually purchased and sold at online exchanges.

News of the theft came on the same day that Techcrunch reported the establishment of a new Bitcoin exchange that promises bank-like security and compliance. The $3.25-million exchange was funded by Canaan Partners and TTR Ventures, with participation from Liberty City Ventures and angel investors.

Headquartered in Singapore, itBit features multi-factor authentication and DDOS attack mitigation. It trades Bitcoin and U.S. dollars, Singapore dollars and euro, using Nasdaq exchange technology to support millions of transactions per second and provides 24/7 customer service.