QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$228 000 USD
MARCH 2012
NEW ZEALAND
BITCOINICA
DESCRIPTION OF EVENTS
"Online bandits made off with at least $228,000 worth of the virtual currency known as Bitcoin after exploiting a vulnerability in a widely used Webhost that gave unfettered access to eight victims' digital wallets." “On March 2, 2012, a hacker was able to obtain customer support privileges for Linode, giving the hacker a unique level of access to customer information. The hacker was able to find out which customers were holding bitcoin wallets. Using that information, the thief logged into individual accounts using a weakness in the Linode manager, a platform customers were using to configure their virtual machines. The hacker rebooted the virtual machines to change the root passwords, giving the hacker access to any account and the bitcoins inside. A total of 46,703 BTC was stolen, worth $228,000 at the time.”
In the early days of bitcoin, security was often a secondary concern. Many people stored wallets online and accessible, including the cryptocurrency exchange Bitcoinica. These types of exploits are easy to avoid by using proper multi-signature cold storage.
HOW COULD THIS HAVE BEEN PREVENTED?
This is a case where simply knowing who's holding the funds and storing them properly offline with multiple signatures would have avoided the issues.
Infographic: An Overview of Compromised Bitcoin Exchange Events (Jan 30)
The Bitcoin Exchange Thefts You May Have Forgotten | Featured Bitcoin News (Jan 29)
Users sue Bitcoin exchange over $460k in missing funds (Feb 3)
List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses [Old] (Jan 28)
Bitcoinica: An Obituary (Feb 4)
Bitcoinica - Bitcoin Wiki (Feb 4)
Bitcoins worth $228,000 stolen from customers of hacked Webhost (Feb 4)
100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25)
List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses (Feb 15)
Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5)
SlowMist Hacked - SlowMist Zone (Jun 26)
security - What is the story behind the "Linode problem"? - Bitcoin Stack Exchange (Mar 14)
