Bitcoin exchange rates hacked
April 4, 2013 in Economics
Hackers attack hit Bitcoin exchange rates
Online services and exchanges dealing in Bitcoins have been hit by hack attacks that led to a drop in the value of the virtual currency.
Trading on the MTGox exchange, which handles most trades in Bitcoins, was sluggish yesterday as the site fought off an attack.
The attack helped to force a swift fall in the price of Bitcoins.
In addition, the Instawallet website – where people store Bitcoins – is offline indefinitely after an attack.
The value of Bitcoins surged to a new high this week with each one worth about $142 (£94). Barely a week ago, each virtual coin was worth only $90.
But Bitcoins dropped sharply in value as the MTGox exchange came under a sustained attack by hackers. The vast majority of trade in Bitcoins takes place via the site.
In a tweet on its Twitter feed, MTGox said it was fighting off a distributed denial-of-service (DDoS) attack, which involves a site being bombarded with huge amounts of data. The attack was one of several against the site this week,
The attacks, coupled with a spike in trading volumes, combined to cause delays in trades being confirmed and led the value of Bitcoins to drop sharply to about $120.
The attacks could be the work of malicious hackers who were trying to ‘game’ the MTGox exchange”
The attacks could be the work of malicious hackers who were trying to “game” the exchange and manipulate the value of Bitcoins so they could cash in, MTGox said in an interview with ComputerWorld. Attackers are thought to be working to a cycle in which they sell Bitcoins when values are high, then mount an attack that forces prices to crash, buy up the cheaper coins and then let the value climb again.
MTGox said it did not know when or if the attacks would cease but said Bitcoin owners should not panic and sell off as values fluctuated. A spokesman for the exchange added that it was in the middle of rebuilding its trading technology but the new system, which would do a better job of handling the high volume of trades, would not be ready until the end of this year.
In a separate development, Instawallet has shut down “indefinitely” after hackers “fraudulently accessed” its core database.
In a statement posted on the Instawallet site it said it planned to open a claim process shortly so people could reclaim their Bitcoin balance.
INSTAWALLET SERVICE NOTICE source:http://notice.instawallet.org/
The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture.
Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is.
In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption.
Important information on claims submission:
- For the first 90 days we will accept claims for individual Instawallets. Your wallet’s URL and key will be used to pre-populate a form to file the claim.
- After 90 days, if no other claim has been received for the same url, your Instawallet balance under 50 BTC will be refunded. If several claims have been filed for the same url, we will process those claims on a case by case basis, under the presumption that the claim we received first belongs to the legitimate balance holder.
- Claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis.
UPDATE: source https://bitcointalk.org/index.php?topic=167215
Dear Instawallet users,
I am a co-founder of Paymium, the company behind Instawallet.
We have now finished our analysis of the events that lead to the suspension of the service. An intruder was able to access the instawallet database. As a result, all “hidden” urls, i.e wallets, have been compromised and are no longer safe to store bitcoins. Funds were stolen: a police report was filed by Paymium with BEFTI ( Brigade d’Enquêtes sur les Fraudes aux Technologies de l’Information, a unit of the French “Police Judiciaire”) and an investigation is in progress. Computer forensic analysis is in progress with independent auditors. We will be able to refund all instawallet balances up to 50 BTC per wallet. In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption.