This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bitcoin Thieves Steal $1.2 Million From Online Wallet Company

While regulated currency like the U.S. dollar has the protection of the FDIC, owners of thousands of bitcoins stored by inputs.io have suffered more than $1 million in losses.

The digital currency known as the bitcoin continues to be controversial as investors consider just how safe they are. After all, aside from the ever-changing value of them and the fact that they're not regulated, there's the idea that hackers could get to them. That's certainly a possibility if you store them on the Internet, like one online digital wallet company did. Cyber thieves got away with $1.2 million worth of bitcoins, simply by attacking the site inputs.io.

Bitcoin

Founder reports theft

Robert McMillan of Wired reports that someone who goes by the handle of TradeFortress told them about the theft of 4,100 bitcoins from the company he founded—inputs.io. Even though bitcoins are a digital currency which pretty much requires the Internet to trade them, he recommends that users store them on a computer that isn't connected to the Internet. Otherwise, hackers could get in and steal them.

Bitcoins are pretty much a unique key or string of code discovered through data mining. Inputs.io was in the digital wallet business, and it stored thousands of bitcoins for customers. It seemed like a good idea at first. The company not only stored bitcoins but also mixed up users' wallets to keep the bitcoins anonymous and sped up payments made through bitcoins.

According to the founder of inputs.io, hackers compromised his site on Oct. 23 and again three days later, making off with 4,100 bitcoins. That was about $1.2 million worth of the digital currency stolen in the two attacks. Only some users had their bitcoins stolen. TradeFortress reported that some of the bitcoins owned by his other business CoinLenders were also taken.

The founder of inputs.io says he doesn't have enough money to pay back all of those whose bitcoins were stolen. He plans to issue partial refunds, however. He says with all of his personal bitcoins and "remaining cold storage coins on Inputs," he has 1540 BTC to pay back everyone whose bitcoins were stolen.

How the hackers did it

He said the hackers who stole the bitcoins did it by pretending to be someone they weren't so they could gain access to Inputs' systems through Linode, the company's cloud-hosting provider. The hackers reportedly compromised a number of email accounts which eventually made it possible for them to reset the password for their Linode server.

-By Michelle Jones

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.61 +42.64 0.24%
S&P 500 2,111.89 +2.97 0.14%
NASDAQ 5,056.73 -3.5160 -0.07%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs