Tagged: Bitcoin

Bit-heist: Over $1mn in bitcoins stolen from Australian online bank

Written by RT News

Published time: November 08, 2013

bitcoin-2_siAn Australian bitcoin bank holding over US$1 million of the crypto-currency has been hacked, leaving an unknown number of users with nothing – one of the largest thefts in the currency’s four-year history.

The incident took place on October 26, when the bank was hacked,  with 4,100 bitcoins valued at $1.3 million stolen, the service’s  operator only known as ‘Tradefortress’ said. He refused to give  his name to the press, also stressing he was not much older than  18.
It took the bank’s owner two weeks to notify the affected  customers.
Bitcoin is a decentralized, crypto-currency, free from any  government or central bank control. Currency is sold and bought  at online exchanges, and those transactions can be virtually  anonymous.
One bitcoin is currently worth more than $300 on Mt. Gox, the  world’s largest bitcoin exchange – up from around $50 in March.  There are 11,925,700 million bitcoins in circulation.
The Sydney man offered the service called Inputs.io, which he  claimed was “one of the most secure web wallets on the  market.” Customers were charged a small fee to keep their  bitcoins there.
The site used two-factor authentication and location-based email  confirmation, and said the page was started to avert “the hack  of bitcoins even if the web server was compromised.”
Some of the hacked money is to be refunded, the operator told  Fairfax Media. Tradefortress said he would use 1,000 of his own  bitcoins, as well as the money the hackers didn’t steal.
“Users are being repaid up to 100 percent depending on the  amount (sliding scale), generally 40-75 percent,”  Tradefortress said.
The operator indicated the attack was possible due to “a  flaw” in the system which allowed the hackers to bypass the  protection.
Currently, there’s a sad face emoticon posted online and a notice  that reads “I know this doesn’t mean much, but I’m sorry, and  saying that I’m very sad that this happened is an  understatement.”

screenshot from https://inputs.io/ 

The response to the incident has been varied, with some users  accusing Tradefortress of making up the whole hacking story to  steal their money. He denies the accusation.
Customer Marco Martoccia tweeted (@sheet_metal) that he had lost  4 bitcoins as part of the heist, worth about $1,200. He said he  was planning to use bitcoins as a part of the deposit for a  house.
Specialists point to a lack of regulation as the main problem  with the currency.
“The users of Inputs.io were trusting a random person with  their money rather than in the real world when you’re dealing  with cash, where you trust banks to look after your money,”  Ty Miller, director of Australian IT security firm Threat  Intelligence, told Fairfax Media.
He recommended storing coins with a strong password on a device  not connected to the internet, using hard-drive encryption and  antivirus protection.
A spokesman for the Australian Federal Police said to his  knowledge, a theft of bitcoins has never been investigated at  either a federal or state level.
The operator stated that he is not planning to address police  with the matter.

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‘Silk Road 2.0’ Launches, Promising A Resurrected Black Market For The Dark Web

Forbes

Andy Greenberg

6th November 2013

Screen-Shot-2013-11-06-at-10_35_48-AMThe Silk Road is dead. But the dark web dream lives on.

On Wednesday morning, Silk Road 2.0 came online, promising a new and slightly improved version of the anonymous black market for drugs and other contraband that the Department of Justice shut down just over a month before. Like the old Silk Road, which until its closure served as the Web’s most popular bazaar for anonymous narcotics sales, the new site uses the anonymity tool Tor and the cryptocurrency Bitcoin to protect the identity of its users. As of Wednesday morning, it already sported close to 500 drug listings, ranging from marijuana to ecstasy to cocaine. It’s even being administered by a new manager using the handle the Dread Pirate Roberts, the same pseudonym adopted by the previous owner and manager of the Silk Road, allegedly the 29-year-old Ross Ulbricht arrested by the FBI in San Francisco on October 2nd.

The only significant visible change from the last Silk Road, spotted by the dark-web-focused site AllThingsVice that first published the site’s new url, is a new security feature that allows users to use their PGP encryption key as an extra authentication measure. It also has a new login page, parodying the seizure notice posted by the Department of Justice on the prior Silk Road’s homepage, with the notice “This Hidden Site Has Been Seized” replaced by the sentence “This Hidden Site Has Risen Again.”

“You can never kill the idea of Silk Road,” read the twitter feed of the new Dread Pirate Roberts twenty minutes before the site’s official launch.

The Silk Road sequel experienced some hiccups coming online–it had planned to launch at 4:20pm on November 5th, a significant time and date for an anarchic drug site. But that launch was delayed for 24 hours, and even now the new Silk Road 2.0 isn’t fully operational–its administrators say they’re still gauging the site’s traffic load before they start accepting orders later this week.

When it does resume sales, the new Silk Road may not have an easy time convincing users to resume their black market business as usual. The previous Silk Road is only one of three anonymous black market sites to shut down in the last six weeks. First the administrators of the competing site Atlantis abruptly announced it would be going offline for “security” reasons, absconding with all the bitcoins that users had stored in their Atlantis accounts. Then last week, the Silk Road alternative site Project Black Flag similarly disappeared, and its administrator MettaDPR posted a message on its user forum admitting that he or she had “panicked” and stolen the site’s bitcoins.

A third site, the older Silk Road competitor Black Market Reloaded, also experienced a temporary crisis earlier in October when an administrator leaked the site’s source code onto the web. Black Market Reloaded’s owner known as Backopy initially said he would shut down the site as a result, but then changed his mind when the leak turned out not to expose any obvious vulnerabilities endangering user privacy.

“I for one do not trust the new [Silk Road],” wrote one user on the site’s forums. “I just get an eerie feeling from the whole idea of it, right now i will steer clear…only time will tell, i want to dive head first into it, but i want to see it play out for a little bit before i slap down another 500 bucks, an investment i made the day before [Silk Road] was closed.”

Many more of Silk Road’s users seem reassured, however, by the fact that Silk Road 2.0 is being managed in part by known administrators from the original Silk Road, particularly a moderator known as Libertas who has served as one of the more vocal leaders of the Silk Road community since Ulbricht, the alleged Dread Pirate Roberts, was arrested.

“Silk Road 2.0 will be reborn better, much much more secure as testament to the tenacity and determination of this wonderful community of ours,” wrote one moderator on the new Silk Road’s forum site with the name Synergy. “We will not be down trodden, we will rise again.”

“Into the breach once more my friends!” wrote one Silk Road vendor on the site known as PerfectScans.

Another user with the handle Steve Jobs took the opportunity to offer a eulogy for 29-year-old Ross Ulbricht, the accused previous Dread Pirate Roberts and owner of the original Silk Road, who was arrested last month and has been extradited from Glen Dyer prison in Oakland, California to a jail in New York where he’s scheduled to have a bail hearing this week.

“Within the excitement and morning light glare of a brand new day for all of us…say a kind prayer for Last DPR,” Steve Jobs writes. “Forsaken, fading, atrophying alone in a concrete box cell… who brought us all together here and gave me a home, now he has none.”

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