Cyber thieves target bitcoin owners

Updated on: 2013-04-15 || Source: bbc.com

 

The bitcoin virtual currency has had a volatile 24 hours that saw values plummet, hack attacks, trading shutdowns and bitcoin-stealing malware.

From the high of $260 (£169) for each bitcoin on 10 April, bitcoins are now worth less than $100 (£65) each.

The main bitcoin exchange shut down for 12 hours to install hardware to help it cope with trading volumes.

In addition, malicious software is emerging that seeks out and empties the virtual wallets of bitcoin owners.

MTGox, on which most bitcoin trading takes place, was overwhelmed earlier this week by the amount of people who joined the exchange to trade the virtual cash. The computer problems prompted a round of panic selling that forced values to plunge.

The exchange went offline to beef up its hardware to cope with trading volumes and stem the fall in value. However, soon after trading resumed the site came under a sustained hack attack which saw it bombarded with data. In a tweet, MTGox said the it was being hit by a "stronger than usual" attack.

It went offline again to avoid the attack and when it re-started, bitcoins continued to fall in value. Early on 12 April each bitcoin was worth about $90 (£58).

'Litecoins'

Owners of bitcoins have also become the target of cyber thieves keen to cash in on the boom in the digital currency.

A phishing gang posted a message to the discussion forum of a website used by many bitcoin traders saying MTGox was about to start trading "litecoins" - an alternative to bitcoins. In the message was a link that supposedly connected to an official MTGox chat site.

In fact, the site that people were taken to if they clicked on the link was fake and, via a booby-trapped update file, installed malicious software that then emptied digital wallets of bitcoins. At least one trader was hit in the attack and lost 34 bitcoins as a result.

In a post about the theft posted to the Bitcointalk forum, the victim said he was "stupid" not to have taken more trouble to stay safe but added: "This is a serious loss for me, and unless this is handled correctly this can also badly affect the community."

It has also emerged that Tyler and Cameron Winklevoss, who famously sued Facebook founder Mark Zuckerberg claiming they had the original idea for the social network, have substantial bitcoin holdings. In an interview with the New York Times, the pair said they owned about $11m of the virtual coins - about 1% of the global supply.

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