Hackers have broken into a digital Bitcoin wallet, Inputs.io, and stolen 4,100 Bitcoins.
With current prices for the alternative digital currency, this is roughly equal to $1.18m.
Inputs.io provides a Bitcoin wallet service where owners can send and receive Bitcoins. It claimed to be the "most secure wallet ever created" and lists 20 different measures it takes to protect the Bitcoins, including encrypted passwords, SSL encryption, location-based authorisation, and a cold storage system.
However, it is obvious that these measures were not enough, and on October 26, hackers compromised the ‘secure’ wallets.
"Two hacks totaling about 4,100 BTC have left Inputs.io unable to pay all user balances," the company said on its site.
"The attacker compromised the hosting account through compromising e-mail 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."
Inputs.io was able to recover some of the Bitcoins, and customers are eligible for a partial refund. Beyond that though, there is not much that can be done. The company does not have enough Bitcoins to repay everyone and is dividing the coins they do have on a sliding scale.
"I know this doesn’t mean much, but I’m sorry, and saying that I’m very sad that this happened is an understatement," Inputs.io said.
Bitcoin is a "digital currency." It was introduced in 2008 and for years remained relegated to the dark corners of the Internet, without much value or mainstream appeal.
That all changed this year as the currency really began to take off. Valued at around 20 cents apiece in 2010, Bitcoin prices are currently nearing $300.
Last month CBR spoke to two Bitcoin users, who came back against allegations of Bitcoin misuse by saying: "Bitcoin can’t be shut down – there is no Bitcoin building or Bitcoin company. It will continue to exist and thrive and countries can either decide to embrace and be cooperative or completely lose all authority and jurisdiction."
