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Online Money Exchange site Hacked

Online Money Exchange site Hacked

bitcoin.jpg Cloud computation is growing and growing in both resources and users. It is considered the new frontier in computing. But is this new wave of computer technology as safe as it may seem?

Bitcoins is an online Cloud computing site where businesses and individuals can make monetary exchanges and transactions. Many people believed it to be a new, safe way to perform online transactions without worrying about people hacking and stealing personal or financial information. However, a hacker proved them all wrong today.

Today, a hacker hacked the Bitcoins website and stole approximately $87,000 from the various users and serves on the site. This is a massive loss to everyone involved and proved that cloud computing still has a long way to go before becoming completely secure.

17 year old Zhou Tong, founder of the Bitcoins exchange, reported on the site’s blog that Bitcoins had to be taken down as a result of some very suspicious activity. Evidently, there had been an exchange of 18,547.66 bitcoins, which equals approximately $87,000. The money was transferred completely in the exchange.

According to bitcoin’s blog, the theft of the $87,000 took place on May 11th at around 1PM. It said that while only a small amount of its reserves were plundered, all withdrawal requests would be honored once the exchange reopens.

“It is with much regret that we write to inform our users of a recent security breach at Bitcoinica,” said a post on the website’s blog. “The overwhelming majority of our bitcoin deposits were not stolen. The thief stole from us not you. All withdrawal requests will be honored.”

It also said that a database on the website was also compromised but as Bitcoinica “uses the most stringent best practices for password security” it would be “extremely unlikely” that full database access would give the attacker knowledge of a user’s password.

In comments made by Zhou on online forum bitcointalk.org, the thieves struck at a server hosted by Rackspace.

Zhou said that he first noticed that something was wrong when he received several emails regarding a password reset for their Rackspace account. Afterwards he connected to the Bitcoin wallet server via SSH and “found that everything is gone.”

After he contacted Rackspace, the company suspended all servers. But Zhousaid that the hacker managed to recreate the server “using our database backup”. He added that the hacker still had an open session on the server and no way has been found to drop the session and fully shut out the hacker or hackers. He said that if the hosting company could terminate the hacker’s session, then “at least the database would be safe.”

Zhou made a later post said he would “discontinue all involvement in Bitcoin-related projects after the Bitcoinica incident has been fully resolved until further notice.”

CloudPro contact Rackspace for a comment but it declined to make any comment.

Earlier in March, hackers also made of with £141,000 of Bitcoins from Bitcoinica, although this time the server was being hosted by cloud hosting company Linode.

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AUTHOR - Michael Peros

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