World's first virtual heist? BitCoin user loses $500,000

A BitCoin collector has lost the equivalent of $500,000 of online currency in possibly the biggest heist of virtual currency.

Online theft is a fact of life nowadays, but yesterday a BitCoin user woke to find his haul of virtual currency had been plundered.

A user with the handle allinvain found 25,000 BitCoins had been stolen. If the thief were to cash-out he or she would net just about $500,000 at current BitCoin-US Dollar exchange rates.

Assuming the story isn't fabricated, allinvain's story could represent the world's first heist of virtual money. It's almost certainly the biggest.

BitCoin is an entirely virtual currency traded via free peer-to-peer software installed on each user's computer. Like most major worldwide money systems, BitCoin is a form of fiat currency, meaning it only has value because people believe it has purchasing power.

Users generate new BitCoins on their computers by performing calculations, although this takes a long time. It's also possible to buy and sell BitCoins for standard currency at various exchange sites and even use BitCoins to pay for some goods and services.

It's not clear if allinvain earned his BitCoins or whether he purchased them. The former seems more likely: in one of his postings at the forums, allinvain claims to be an early adopter of BitCoin, and says he was saving up to launch a BitCoin-based eBay clone. Despite the appropriately ironic username, allinvain appears to have a trusted track record within the BitCoin community.

Although BitCoins are cryptographically protected and traded, the weak point is the user's computer where the wallet.dat file is stored. This stores the cryptographic keys that unlocks the entire BitCoin account and provides the ability to transfer funds. It's up to the user to protect this file and it appears somebody hacked into allinvain's home PC to access the unencrypted file.

Frustratingly, the nature of the BitCoin network means allinvain knows the thief's BitCoin ID, and is able to track him or her as they launder the money through various other accounts. However, the decentralized nature of the BitCoin network is designed to make tracing individuals in the real world impossible. Allinvain can do nothing more than hope somebody recognizes the thief's BitCoin ID, or spots that they're receiving some of allinvain's stolen BitCoins.

Because of the anonymity inherent in BitCoin trading, BitCoins are used to fund drug trafficking, amongst other things, and recently attracted the attention of two US Senators, who want to shutdown the network.

Join the CSO newsletter!

Error: Please check your email address.

Tags online securitywebinternet

More about eBayetwork

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Keir Thomas

Latest Videos

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

  • 150x50

    IDG Live Webinar:The right collaboration strategy will help your business take flight

    Speakers - Mike Harris, Engineering Services Manager, Jetstar - Christopher Johnson, IT Director APAC, 20th Century Fox - Brent Maxwell, Director of Information Systems, THE ICONIC - IDG MC/Moderator Anthony Caruana

    Play Video

More videos

Blog Posts