Bitcoinica Hot Wallet Hack - Revision history

Azoundria: 30 minutes. Generated and published a promotional tweet for the incident. Reviewed and revised the article through esxtensive proofreading. Re-ordered an out of order item in the timeline. Attempted research on some of the inconsistent dates reported in other media. More information throughout and links to BitcoinTalk profile.

2024-04-22T20:12:56Z

30 minutes. Generated and published a promotional tweet for the incident. Reviewed and revised the article through esxtensive proofreading. Re-ordered an out of order item in the timeline. Attempted research on some of the inconsistent dates reported in other media. More information throughout and links to BitcoinTalk profile.

Show changes

Azoundria: 30 minutes. Reviewing and tweaking the wiki timeline significantly. Integrating information from 2 different BitcoinTalk articles, as well as Zhou Tong's BitcoinTalk profile. Adding introduction description to case. Updated to add in the prevention section.

2024-04-19T18:50:52Z

30 minutes. Reviewing and tweaking the wiki timeline significantly. Integrating information from 2 different BitcoinTalk articles, as well as Zhou Tong's BitcoinTalk profile. Adding introduction description to case. Updated to add in the prevention section.

Show changes

Azoundria: 30 minutes. Integrating source from 2017 on Alexander Vinnick and Mt. Gox. All sources in article have now been resolved. Reviewing open sources and adding some more BitcoinTalk forum posts that were open to the page.

2024-04-18T20:45:42Z

30 minutes. Integrating source from 2017 on Alexander Vinnick and Mt. Gox. All sources in article have now been resolved. Reviewing open sources and adding some more BitcoinTalk forum posts that were open to the page.

← Older revision		Revision as of 14:45, 18 April 2024
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	{{Case Study Under Construction~~}}{{Unattributed Sources~~}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]Bitcoinica was a popular online exchange in the early days of bitcoin based ~~in New Zealand.~~		{{Case Study Under Construction}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]Bitcoinica was a popular online exchange in the early days of bitcoin based in New Zealand.<ref name=":8">[https://bitcointalk.org/index.php?topic=233356.msg2461127#msg2461127 Zhou Tong - CoinJar - Australia's first VC-backed Bitcoin startup - BitcoinTalk] (Accessed Apr 18, 2024)</ref><ref>https://bitcointalk.org/index.php?topic=291175.msg3115915#msg3115915</ref>

	~~This exchange or platform is based in New Zealand, or the incident targeted people primarily~~ in New Zealand.~~<ref name="bitcoinmagazine-23" />~~<ref name=":7">[https://~~web.archive~~.org/~~web/20120516122116/https://nakedsecurity~~.~~sophos~~.~~com/2012/05/14/bitcoin~~-~~exchange-gets-attacked-and-loses~~-~~cash~~-~~again/~~ Bitcoin ~~exchange gets attacked and loses cash...again!~~ - ~~Sophos Archive May 16th, 2012 6:21:16 AM MDT~~] (Accessed Apr 17, 2024)</ref><ref>https://~~news~~.~~8btc~~.~~com/analyst-mt-gox-lost-100000-more-bitcoins-apart-from-the-2-5-billion-hack~~</ref>

	== About Bitcoinica ==		== About Bitcoinica ==
	Bitcoinica was an online platform launched via a forum thread on BitcoinTalk on September 8, 2011<ref name=":3">[https://bitcointalk.org/index.php?topic=81581.0 Zhou Tong - I'm leaving Bitcoin - BitcoinTalk] (Accessed Apr 9, 2024)</ref><ref name="bitcoinwiki-24" /><ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform promises advanced features such as margin trading, stop orders, guaranteed liquidity, and short selling<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. With support for market, limit, stop, and trailing stop order types, Bitcoinica provided a forex-like experience for traders<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. All accounts were margin accounts by default, allowing users to trade more than their deposited amount<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform enabled leveraged speculation in its contract-for-difference (CFD) market against the Bitcoin to USD exchange rate<ref name="bitcoinwiki-24" />.		Bitcoinica was an online platform launched via a forum thread on BitcoinTalk on September 8, 2011<ref name=":3">[https://bitcointalk.org/index.php?topic=81581.0 Zhou Tong - I'm leaving Bitcoin - BitcoinTalk] (Accessed Apr 9, 2024)</ref><ref name="bitcoinwiki-24" /><ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform promises advanced features such as margin trading, stop orders, guaranteed liquidity, and short selling<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. With support for market, limit, stop, and trailing stop order types, Bitcoinica provided a forex-like experience for traders<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. All accounts were margin accounts by default, allowing users to trade more than their deposited amount<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform enabled leveraged speculation in its contract-for-difference (CFD) market against the Bitcoin to USD exchange rate<ref name="bitcoinwiki-24" />.

	The Bitcoinica exchange platform was based in New Zealand, and founded by Zhou Tong<ref name="bitcoinmagazine-23" />. Bitcoinica emphasized security by promoting that they did not operate a Bitcoin wallet, instead storing funds in Mt. Gox and bank accounts instead<ref name=":4" />. Operating on Heroku, a secure cloud platform, Bitcoinica ensures a professional and revolutionary trading environment without transaction fees for orders under ฿50<ref name=":4" />.<blockquote>Despite his position as the creator of a financial speculation service and his strong belief in libertarian capitalist ideals, Bitcoinica to him has never been about the profit. “Bitcoinica is not a money making machine,” he writes. “It’s just a product that sets a high standard for the Bitcoin community.”<ref name="bitcoinmagazine-23" /></blockquote>		The Bitcoinica exchange platform was based in New Zealand, and founded by Zhou Tong<ref name="bitcoinmagazine-23" /><ref name=":9">[https://www.youtube.com/watch?v=VNVeuwxbqb0 Zhou Tong is just Zhou Tong - YouTube] (Accessed Apr 18, 2024)</ref>. Bitcoinica emphasized security by promoting that they did not operate a Bitcoin wallet, instead storing funds in Mt. Gox and bank accounts instead<ref name=":4" />. Zhou Tong spent time to help fight against phishing attacks<ref>[https://bitcointalk.org/index.php?topic=43816.msg523321#msg523321 Beware of Mt. Gox Phishing Attack! And how we can reduce the risk for OTHERS. - BitcoinTalk] (Accessed April 18, 2024)</ref>. Operating on Heroku, a secure cloud platform, Bitcoinica ensures a professional and revolutionary trading environment without transaction fees for orders under ฿50<ref name=":4" />.<blockquote>Despite his position as the creator of a financial speculation service and his strong belief in libertarian capitalist ideals, Bitcoinica to him has never been about the profit. “Bitcoinica is not a money making machine,” he writes. “It’s just a product that sets a high standard for the Bitcoin community.”<ref name="bitcoinmagazine-23" /></blockquote>
	== The Reality ==		== The Reality ==
	The history of Bitcoinica had already had [[Bitcoinica Linode Web Host Hack\|a security breach earlier in the same year]]<ref name=":7" /><ref name="bitcoinwiki-24" />. On March 1st, 2012, the service had experienced [[Bitcoinica Linode Web Host Hack\|a significant loss of over 43,000 bitcoins due to an internal security breach at their Linode web hosting provider]]<ref name="bitcoinwiki-24" />. The Bitcoinica server had access to a hot wallet with 18,000 bitcoin as well as API keys for a Mt. Gox wallet which held over 30,000 bitcoin<ref name=":5">[https://bitcointalk.org/index.php?topic=81045.msg894312#msg894312 Zhou Tong - "The hacker almost gained access to our Mt. Gox API keys, before I revoke them! He could get 30,000+ BTC easily if I was asleep, or busy." - BitcoinTalk] (Accessed Apr 5, 2024)</ref> accessible to a single email address<ref name="bitcointalklistold-20" />. The email address was apparently accessible from an insecure mail server<ref name=":6">[https://bitcointalk.org/index.php?topic=81045.msg896112#msg896112 Zhou Tong - "The root cause of this problem is an email server compromise. The email server belongs to one of our team members. Reminder again: Please do not reuse your Bitcoinica passwords as the database server was compromised. Do not click any links in the email. All Bitcoinica announcements will be updated on Bitcoinica website when available." - BitcoinTalk] (Accessed Apr 9, 2024)</ref>.		The history of Bitcoinica had already had [[Bitcoinica Linode Web Host Hack\|a security breach earlier in the same year]]<ref name=":7">[https://web.archive.org/web/20120516122116/https://nakedsecurity.sophos.com/2012/05/14/bitcoin-exchange-gets-attacked-and-loses-cash-again/ Bitcoin exchange gets attacked and loses cash...again! - Sophos Archive May 16th, 2012 6:21:16 AM MDT] (Accessed Apr 17, 2024)</ref><ref name="bitcoinwiki-24" />. On March 1st, 2012, the service had experienced [[Bitcoinica Linode Web Host Hack\|a significant loss of over 43,000 bitcoins due to an internal security breach at their Linode web hosting provider]]<ref name="bitcoinwiki-24" />. The Bitcoinica server had access to a hot wallet with 18,000 bitcoin as well as API keys for a Mt. Gox wallet which held over 30,000 bitcoin<ref name=":5">[https://bitcointalk.org/index.php?topic=81045.msg894312#msg894312 Zhou Tong - "The hacker almost gained access to our Mt. Gox API keys, before I revoke them! He could get 30,000+ BTC easily if I was asleep, or busy." - BitcoinTalk] (Accessed Apr 5, 2024)</ref> accessible to a single email address<ref name="bitcointalklistold-20" />. The email address was apparently accessible from an insecure mail server<ref name=":6">[https://bitcointalk.org/index.php?topic=81045.msg896112#msg896112 Zhou Tong - "The root cause of this problem is an email server compromise. The email server belongs to one of our team members. Reminder again: Please do not reuse your Bitcoinica passwords as the database server was compromised. Do not click any links in the email. All Bitcoinica announcements will be updated on Bitcoinica website when available." - BitcoinTalk] (Accessed Apr 9, 2024)</ref>.

	== What Happened ==		== What Happened ==
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	\|Updated BitcoinTalk List		\|Updated BitcoinTalk List
	\|The incident is included in the updated BitcoinTalk list<ref name="bitcointalklist-87" />. The amount is increased and valued according to the January 2014 price. A disclaimer is added about the amount potentially increasing as the liquidation proceeds<ref name="bitcointalklist-87" />.		\|The incident is included in the updated BitcoinTalk list<ref name="bitcointalklist-87" />. The amount is increased and valued according to the January 2014 price. A disclaimer is added about the amount potentially increasing as the liquidation proceeds<ref name="bitcointalklist-87" />.
			\|-
			\|April 24th, 2013 4:30:15 AM MDT
			\|Zhou Tong Video Uploaded
			\|Zhou Tong uploads a video identifying themselves, showing a credit card they were recently issued, and that they are 18 years old at this point in time<ref name=":9" /><ref>[https://bitcointalk.org/index.php?topic=186261.msg1929327#msg1929327 Zhou Tong - I am who I am - BitcoinTalk] (Accessed Apr 18, 2024)</ref>.
			\|-
			\|June 13th, 2013 3:47:17 AM MDT
			\|Zhou Tong Joining CoinJar
			\|Ryan Zhou announces that he's joined the team of CoinJar<ref name=":8" />.
	\|-		\|-
	\|February 3rd, 2017 10:00:04 AM MST		\|February 3rd, 2017 10:00:04 AM MST
	\|Bitcoin.com Article		\|Bitcoin.com Article
	\|The incident is included with specific mention in a list of bitcoin thefts which you may have forgotten about, published by news site Bitcoin.com<ref name="newsdotbitcoin-7" />.		\|The incident is included with specific mention in a list of bitcoin thefts which you may have forgotten about, published by news site Bitcoin.com<ref name="newsdotbitcoin-7" />.
			\|-
			\|September 9th, 2017 4:26:00 AM MDT
			\|Tuur Demeester Tweet
			\|Bitcoin analyst Tuur Demeester reports on the connection between Alexander Vinnick, who has recently been arrested, and the Bitcoinica stolen coins<ref name=":10">[https://twitter.com/TuurDemeester/status/906463695034777600 TuurDemeester - "It's likely that the recently arrested A. Vinnik was a money launderer, not the mtgox/bitcoinica thief. #divisionoflabor applies to crime." - Twitter] (Accessed Apr 18, 2024)</ref>. He suggests that Vinnick assisted with laundering the funds and wasn't involved in the initial theft<ref name=":10">[https://twitter.com/TuurDemeester/status/906463695034777600 TuurDemeester - "It's likely that the recently arrested A. Vinnik was a money launderer, not the mtgox/bitcoinica thief. #divisionoflabor applies to crime." - Twitter] (Accessed Apr 18, 2024)</ref>.
			\|-
			\|September 10th, 2017
			\|8BTC News Article
			\|"Earlier this year, when BTC-E owner Alexander Vinnick was linked to the Mt.Gox and Bitcoinica hacks and was arrested by the Greek government, entirely new pieces of information in regard to the Mt. Gox hacks surfaced. Security research firm WizSec, which first linked Mt. Gox hacks to Vinnick and had been collaborating with various law enforcement agencies, explained that it was unlikely for a single person to carry out the thefts."<ref name=":11">[https://web.archive.org/web/20170914082828/https://news.8btc.com/analyst-mt-gox-lost-100000-more-bitcoins-apart-from-the-2-5-billion-hack Analyst: Mt. Gox Lost 100,000 More Bitcoins Apart From the $2.5 Billion Hack - 8BTC News Archive September 14th, 2017 2:28:28 AM MDT]</ref>.
	\|}		\|}

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	=== Zhou Tong Leaving Bitcoin ===		=== Zhou Tong Leaving Bitcoin ===
	Founder Zhou Tong decided to leave bitcoin entirely<ref name="bitcoinmagazine-23" />. In a forum post from May 13, 2012, user Zhou Tong announced their departure from Bitcoin-related projects following the Bitcoinica incident, where they will discontinue involvement until further notice<ref name=":3" />. Despite their belief in Bitcoin's potential for financial liberty, they expressed a need to pursue other passions and projects<ref name=":3" />.<blockquote>“I always believe in Bitcoin, or simply anything that brings people financial liberty. I have heavily invested in Bitcoin (I purchased one 1,000 BTC gold coin from Casascius and will keep it for as long as I can).”</blockquote>The announcement received mixed responses from the community, with many expressing gratitude for Zhou Tong's contributions and wishing them success in their future endeavors, while others urged them to reconsider<ref name=":3" />. Vitalik Buterin had strong praise for Zhou Tong and criticized his critics<ref name="bitcoinmagazine-23" />.<blockquote>Zhou Tong has often been reviled as a scammer, and this crisis has, predictably, only amplified such cries. But his actions over the past eight months do not paint the picture of a man who consciously set out to defraud the public with a Ponzi scheme or an arcane system of liquidation rules; rather, they paint the picture of a teenager, still uncorrupted by the rigidities of the status quo, ready to discover the world and find a place where he can make a difference. Of course, Bitcoinica’s history is marked by security blunders and telling signs of Zhou’s inexperience. However, failure is an inevitable part of learning and innovation, and if the Bitcoin community begins to treat failure as an unforgivable sin and every blunder as proof of moral turpitude, then it will cease to be a community that values learning and innovation at all. Instead, it will become yet another manifestation of the inflexible and bureaucratic status quo.</blockquote>		Founder Zhou Tong decided to leave bitcoin entirely<ref name="bitcoinmagazine-23" />. In a forum post from May 13, 2012, user Zhou Tong announced their departure from Bitcoin-related projects following the Bitcoinica incident, where they will discontinue involvement until further notice<ref name=":3" />. Despite their belief in Bitcoin's potential for financial liberty, they expressed a need to pursue other passions and projects<ref name=":3" />.<blockquote>“I always believe in Bitcoin, or simply anything that brings people financial liberty. I have heavily invested in Bitcoin (I purchased one 1,000 BTC gold coin from Casascius and will keep it for as long as I can).”</blockquote>The announcement received mixed responses from the community, with many expressing gratitude for Zhou Tong's contributions and wishing them success in their future endeavors, while others urged them to reconsider<ref name=":3" />. Vitalik Buterin had strong praise for Zhou Tong and criticized his critics<ref name="bitcoinmagazine-23" />.<blockquote>Zhou Tong has often been reviled as a scammer, and this crisis has, predictably, only amplified such cries. But his actions over the past eight months do not paint the picture of a man who consciously set out to defraud the public with a Ponzi scheme or an arcane system of liquidation rules; rather, they paint the picture of a teenager, still uncorrupted by the rigidities of the status quo, ready to discover the world and find a place where he can make a difference. Of course, Bitcoinica’s history is marked by security blunders and telling signs of Zhou’s inexperience. However, failure is an inevitable part of learning and innovation, and if the Bitcoin community begins to treat failure as an unforgivable sin and every blunder as proof of moral turpitude, then it will cease to be a community that values learning and innovation at all. Instead, it will become yet another manifestation of the inflexible and bureaucratic status quo.</blockquote>

			=== Funds Moved By Alexander Vinnick ===
			Alexander Vinnick is believed to be responsible for the funds being cashed out<ref name=":11" /><ref name=":10" />.

	=== Lawsuit Against Platform ===		=== Lawsuit Against Platform ===
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	=== Identity Of The Hacker ===		=== Identity Of The Hacker ===
	According to BitcoinTalk, the hacker is unknown<ref name="bitcointalklistold-20" />.		According to BitcoinTalk, the hacker is unknown<ref name="bitcointalklistold-20" />. While the coins appear to have been laundered by Alexander Vinnick<ref name=":11" />, it is considered unlikely by many blockchain analysts that he was also the hacker<ref name=":10" />.

	=== Wendon Group Legal Action ===		=== Wendon Group Legal Action ===

Azoundria: 30 minutes. Review and improve summary description. Incorporate information from bitcoin transaction throughout wiki page. Clean up timeline one entry. Adding information from Zhou Tong departure post. Incorporating information from Sophos article. Improvements to reality section and linking to the other article.

2024-04-17T16:34:45Z

30 minutes. Review and improve summary description. Incorporate information from bitcoin transaction throughout wiki page. Clean up timeline one entry. Adding information from Zhou Tong departure post. Incorporating information from Sophos article. Improvements to reality section and linking to the other article.

Show changes

Azoundria: 30 minutes. Filling in What Happened section. Added in lots more information about Bitcoinica from the BitcoinTalk forums and different posts which were found there.

2024-04-09T17:34:35Z

30 minutes. Filling in What Happened section. Added in lots more information about Bitcoinica from the BitcoinTalk forums and different posts which were found there.

← Older revision		Revision as of 11:34, 9 April 2024
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	{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.		{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.

	This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-23" /><ref>[https://bitcointalk.org/index.php?topic=~~81045~~.~~msg894312#msg894312~~ Zhou Tong - ~~"The hacker almost gained access to our Mt. Gox API keys, before I revoke them! He could get 30,000+ BTC easily if~~ I ~~was asleep, or busy."~~ - BitcoinTalk] (Accessed Apr 5, 2024)~~</ref><ref>https://bitcointalk.org/index.php?topic=81045.msg896112#msg896112</ref><ref>https://bitcointalk.org/index.php?topic=81581.0;topicseen~~</ref><ref>https://nakedsecurity.sophos.com/2012/05/14/bitcoin-exchange-gets-attacked-and-loses-cash-again/</ref><ref>https://news.8btc.com/analyst-mt-gox-lost-100000-more-bitcoins-apart-from-the-2-5-billion-hack</ref>		This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-23" /><ref name=":3">[https://bitcointalk.org/index.php?topic=81581.0 Zhou Tong - I'm leaving Bitcoin - BitcoinTalk] (Accessed Apr 9, 2024)</ref><ref>https://nakedsecurity.sophos.com/2012/05/14/bitcoin-exchange-gets-attacked-and-loses-cash-again/</ref><ref>https://news.8btc.com/analyst-mt-gox-lost-100000-more-bitcoins-apart-from-the-2-5-billion-hack</ref>

	== About Bitcoinica ==		== About Bitcoinica ==
	Bitcoinica was an online platform launched on September 8, 2011, ~~enabling~~ leveraged speculation in its contract-for-difference (CFD) market against the Bitcoin to USD exchange rate<ref name="bitcoinwiki-24" />.		Bitcoinica was an online platform launched via a forum thread on BitcoinTalk on September 8, 2011<ref name=":3" /><ref name="bitcoinwiki-24" /><ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform promises advanced features such as margin trading, stop orders, guaranteed liquidity, and short selling<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. With support for market, limit, stop, and trailing stop order types, Bitcoinica provided a forex-like experience for traders<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. All accounts were margin accounts by default, allowing users to trade more than their deposited amount<ref name=":4">[https://bitcointalk.org/index.php?topic=42267.msg514429 Bitcoinica - Advanced Bitcoin Trading Platform - BitcoinTalk] (Accessed Apr 9, 2024)</ref>. The platform enabled leveraged speculation in its contract-for-difference (CFD) market against the Bitcoin to USD exchange rate<ref name="bitcoinwiki-24" />.

	The Bitcoinica exchange platform was based in New Zealand, and founded by Zhou Tong<ref name="bitcoinmagazine-23" />.<blockquote>Despite his position as the creator of a financial speculation service and his strong belief in libertarian capitalist ideals, Bitcoinica to him has never been about the profit. “Bitcoinica is not a money making machine,” he writes. “It’s just a product that sets a high standard for the Bitcoin community.”<ref name="bitcoinmagazine-23" /></blockquote>		The Bitcoinica exchange platform was based in New Zealand, and founded by Zhou Tong<ref name="bitcoinmagazine-23" />. Bitcoinica emphasized security by promoting that they did not operate a Bitcoin wallet, instead storing funds in Mt. Gox and bank accounts instead<ref name=":4" />. Operating on Heroku, a secure cloud platform, Bitcoinica ensures a professional and revolutionary trading environment without transaction fees for orders under ฿50<ref name=":4" />.<blockquote>Despite his position as the creator of a financial speculation service and his strong belief in libertarian capitalist ideals, Bitcoinica to him has never been about the profit. “Bitcoinica is not a money making machine,” he writes. “It’s just a product that sets a high standard for the Bitcoin community.”<ref name="bitcoinmagazine-23" /></blockquote>
	== The Reality ==		== The Reality ==
	The history of Bitcoinica was marred by security breaches and financial losses<ref name="bitcoinwiki-24" />. On March 1st, 2012, the site experienced a significant loss of over 43,000 bitcoins due to an internal security breach at its web hosting provider<ref name="bitcoinwiki-24" />.		The history of Bitcoinica was marred by security breaches and financial losses<ref name="bitcoinwiki-24" />. On March 1st, 2012, the site experienced a significant loss of over 43,000 bitcoins due to an internal security breach at its web hosting provider<ref name="bitcoinwiki-24" />. The site had a hot wallet with 18,000 bitcoin as well as API keys for a Mt. Gox wallet which held over 30,000 bitcoin<ref name=":5">[https://bitcointalk.org/index.php?topic=81045.msg894312#msg894312 Zhou Tong - "The hacker almost gained access to our Mt. Gox API keys, before I revoke them! He could get 30,000+ BTC easily if I was asleep, or busy." - BitcoinTalk] (Accessed Apr 5, 2024)</ref> accessible to a single email address<ref name="bitcointalklistold-20" />. The email address was apparently accessible from an insecure mail server<ref name=":6">[https://bitcointalk.org/index.php?topic=81045.msg896112#msg896112 Zhou Tong - "The root cause of this problem is an email server compromise. The email server belongs to one of our team members. Reminder again: Please do not reuse your Bitcoinica passwords as the database server was compromised. Do not click any links in the email. All Bitcoinica announcements will be updated on Bitcoinica website when available." - BitcoinTalk] (Accessed Apr 9, 2024)</ref>.

	== What Happened ==		== What Happened ==
	~~The specific events~~ of ~~the loss~~ and ~~how it came about. What actually happened~~ to ~~cause the loss and some~~ of ~~the events leading up to it~~.		In early May, an attacker compromised the email address of an exchange operator and used their access to initiate a withdrawal of 18547.66867623 BTC.
	{\| class="wikitable"		{\| class="wikitable"
	\|+Key Event Timeline - Bitcoinica Hot Wallet Hack		\|+Key Event Timeline - Bitcoinica Hot Wallet Hack
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	!Description		!Description
	\|-		\|-
	\|September 8th, 2011		\|September 4th, 2011
			\|Building Service Starts
			\|Zhou Tong starts building the Bitcoinica trading platform<ref name=":3" />.
			\|-
			\|September 8th, 2011 8:27:54 AM MDT
	\|Bitcoinica Service Launches		\|Bitcoinica Service Launches
	\|The Bitcoinica service is ~~launched~~<ref name="bitcoinwiki-24" />.		\|The Bitcoinica service is announced on the BitcoinTalk forum<ref name=":4" />. This is tracked as a date of September 8th according to Bitcoin Wiki<ref name="bitcoinwiki-24" /> and September 9th according to found Zhou Tong<ref name=":3" />.
	\|-		\|-
	\|May 6th, 2012		\|May 6th, 2012
Line 29:		Line 33:
	\|BitcoinTalk Emergency Thread		\|BitcoinTalk Emergency Thread
	\|Bitcoinica administrator Zhou Tong posts an emergency thread announcing a suspicious transaction on the platform<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. The suspicious Bitcoin transaction not initiated by any company owners, prompting the suspension of Bitcoinica's servers for a security investigation<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. The transaction involved a significant loss of 18,547.66867623 BTC<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. While financial and trading data were deemed safe apart from the Bitcoin loss, concerns arose within the community about the vulnerability of hosted systems and the need for enhanced security measures<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. Comments express shock at the severity of the loss and skepticism about Bitcoinica's legitimacy, with some suggesting the incident as proof of previous warnings regarding the platform's credibility. Despite assurances from Bitcoinica's founder, doubts lingered about the site's security practices and potential scams within the Bitcoin community<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>.		\|Bitcoinica administrator Zhou Tong posts an emergency thread announcing a suspicious transaction on the platform<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. The suspicious Bitcoin transaction not initiated by any company owners, prompting the suspension of Bitcoinica's servers for a security investigation<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. The transaction involved a significant loss of 18,547.66867623 BTC<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. While financial and trading data were deemed safe apart from the Bitcoin loss, concerns arose within the community about the vulnerability of hosted systems and the need for enhanced security measures<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>. Comments express shock at the severity of the loss and skepticism about Bitcoinica's legitimacy, with some suggesting the incident as proof of previous warnings regarding the platform's credibility. Despite assurances from Bitcoinica's founder, doubts lingered about the site's security practices and potential scams within the Bitcoin community<ref name=":2">[https://bitcointalk.org/index.php?topic=81045.0 <nowiki>[Emergency ANN] Bitcoinica site is taken offline for security investigation - BitcoinTalk</nowiki>] (Accessed Apr 5, 2024)</ref>.
			\|-
			\|May 11th, 2012 7:37:24 AM MDT
			\|Mt. Gox API Keys At Risk
			\|Zhou Tong reveals that the attacker was also close to obtaining their Mt. Gox API keys, which could have been used to steal over 30,000 more bitcoin<ref name=":5" />.
	\|-		\|-
	\|May 11th, 2012		\|May 11th, 2012
Line 37:		Line 45:
	\|BitcoinTalk Reported Time		\|BitcoinTalk Reported Time
	\|The blockchain timestamp of the theft reported by BitcoinTalk, without any timezone being specified<ref name="bitcointalklistold-20" />. The BitcoinTalk forums generally have posts with timestamps specified in UTC.		\|The blockchain timestamp of the theft reported by BitcoinTalk, without any timezone being specified<ref name="bitcointalklistold-20" />. The BitcoinTalk forums generally have posts with timestamps specified in UTC.
			\|-
			\|May 12th, 2012 4:03:41 AM MDT
			\|Email Server Compromise Revealed
			\|Zhou Tong reveals that an email server belonging to one of their team members was compromised<ref name=":6" />. In addition, it is revealed that the database server was compromised and the private information of all customers was exposed<ref name=":6" />. Customers are recommended not to reuse passwords, and there is no mention of a hashing algorithm being applied to the stored passwords<ref name=":6" />.
	\|-		\|-
	\|May 12, 2012		\|May 12, 2012
	\|Bitcoin.com Date Reported		\|Bitcoin.com Date Reported
	\|"On May 12, 2012, a hacker breached the Bitcoinica Rackspace server, according to the now-defunct exchange’s founder Zhou Tong."<ref name="newsdotbitcoin-7" />		\|"On May 12, 2012, a hacker breached the Bitcoinica Rackspace server, according to the now-defunct exchange’s founder Zhou Tong."<ref name="newsdotbitcoin-7" />
			\|-
			\|May 13th, 2012 7:02:13 AM MDT
			\|Zhou Tong Leaving Bitcoin
			\|Zhou Tong announces that he's leaving bitcoin.
	\|-		\|-
	\|May 14th, 2012 6:12:46 AM MDT		\|May 14th, 2012 6:12:46 AM MDT
Line 68:		Line 84:

	== Technical Details ==		== Technical Details ==
	The vulnerability reportedly happened through a compromised email address, which had a higher level of permissions than necessary<ref name="bitcointalklistold-20" />. The chief transaction involved in the theft is 7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8<ref name=":1" />, which was announced on the BitcoinTalk forums<ref name=":2" />.		The vulnerability reportedly happened through a compromised email address, which had a higher level of permissions than necessary<ref name="bitcointalklistold-20" />. This was reportedly compromised through a vulnerable email server<ref name=":6" />. The chief transaction involved in the theft is 7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8<ref name=":1" />, which was announced on the BitcoinTalk forums<ref name=":2" />.

	=== BitcoinTalk Summary ===		=== BitcoinTalk Summary ===
Line 88:		Line 104:

	=== Suspicious Transaction Reported ===		=== Suspicious Transaction Reported ===
	Zhou Tong reported a suspicious Bitcoin transaction not initiated by any company owners, prompting the suspension of Bitcoinica's servers for a security investigation<ref name=":2" />. The transaction involved a significant loss of 18,547.66867623 BTC<ref name=":2" />. While financial and trading data were deemed safe apart from the Bitcoin loss, concerns arose within the community about the vulnerability of hosted systems and the need for enhanced security measures<ref name=":2" />. Comments express shock at the severity of the loss and skepticism about Bitcoinica's legitimacy, with some suggesting the incident as proof of previous warnings regarding the platform's credibility<ref name=":2" />. Despite assurances from Bitcoinica's founder, doubts lingered about the site's security practices and potential scams within the Bitcoin community<ref name=":2" />.		Zhou Tong reported a suspicious Bitcoin transaction not initiated by any company owners, prompting the suspension of Bitcoinica's servers for a security investigation<ref name=":2" />. The transaction involved a significant loss of 18,547.66867623 BTC<ref name=":2" />. While financial and trading data were deemed safe apart from the Bitcoin loss, concerns arose within the community about the vulnerability of hosted systems and the need for enhanced security measures<ref name=":2" />. Comments express shock at the severity of the loss and skepticism about Bitcoinica's legitimacy, with some suggesting the incident as proof of previous warnings regarding the platform's credibility<ref name=":2" />. Despite assurances from Bitcoinica's founder, doubts lingered about the site's security practices and potential scams within the Bitcoin community<ref name=":2" />. It was later revealed that the same email address could have withdrawn over 30,000 bitcoin from Mt. Gox through an API key<ref name=":5" /> and that the root cause of the breach was an entire email server being compromised<ref name=":6" />.

	== Ultimate Outcome ==		== Ultimate Outcome ==

Azoundria: 30 minutes. Confirmed sources already integrated in wiki article. Integrating Bitcoin Wiki article into our wiki. Integrated all information from Kyle Gibson. Integrated inforamtion from BitcoinTalk updated list. Integrated information from the BitMarket.eu platform which used Bitcoinica. Integrated information from emergency BitcoinTalk forum thread. Another source expanded.

2024-04-05T22:14:08Z

30 minutes. Confirmed sources already integrated in wiki article. Integrating Bitcoin Wiki article into our wiki. Integrated all information from Kyle Gibson. Integrated inforamtion from BitcoinTalk updated list. Integrated information from the BitMarket.eu platform which used Bitcoinica. Integrated information from emergency BitcoinTalk forum thread. Another source expanded.

Show changes

Azoundria: 30 minutes. Integrated additional information from BitcoinTalk hack list. Added in further information and source from BitMarket.eu, who stored their funds on Bitcoinica. Formatting tweaks on the article. Added information from Bitcoin Magazine Obituary including a specific quote from Vitalik Buterin.

2024-04-02T19:07:38Z

30 minutes. Integrated additional information from BitcoinTalk hack list. Added in further information and source from BitMarket.eu, who stored their funds on Bitcoinica. Formatting tweaks on the article. Added information from Bitcoin Magazine Obituary including a specific quote from Vitalik Buterin.

← Older revision		Revision as of 13:07, 2 April 2024
Line 1:		Line 1:
	{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.		{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.

	This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="~~bitcointalklistold~~-20" /><ref name="~~bitcoinmagazine~~-23" /><ref name="~~bitcoinwiki~~-24" /><ref name="~~kylegibson~~-86" /><ref name="~~bitcointalklist~~-87" />		This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-23" /><ref name="bitcoinwiki-24" /><ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name=":0">[https://bitcointalk.org/index.php?topic=5441.msg1413156#msg1413156 M4V3r - "Earlier this year, I had this "genius" idea which led me to making a fatal mistake. I thought I could provide a hedge fund service for Bitmarket users. There were other sites providing this service so I guesses that it could be successful. I had experience in trading before, all I needed is a platform. And there was one - Bitcoinica." - BitcoinTalk] (Accessed Apr 2, 2024)</ref><ref>https://bitcointalk.org/index.php?topic=81045.0</ref><ref>https://bitcointalk.org/index.php?topic=81045.msg894312#msg894312</ref><ref>https://bitcointalk.org/index.php?topic=81045.msg896112#msg896112</ref><ref>https://bitcointalk.org/index.php?topic=81581.0;topicseen</ref>

	== About Bitcoinica ==		== About Bitcoinica ==
Line 25:		Line 25:
	\|“On May 6, 2012, bitcoin exchange Bitcoinica announced that their hot wallet had been hacked.”		\|“On May 6, 2012, bitcoin exchange Bitcoinica announced that their hot wallet had been hacked.”
	\|-		\|-
	\|May 12, 2012~~, 11~~:19:00 AM		\|May 12th, 2012 5:19:00 AM MDT
	\|BitcoinTalk Reported Time		\|BitcoinTalk Reported Time
	\|The blockchain timestamp of the theft reported by BitcoinTalk, without any timezone being specified<ref name="bitcointalklistold-20" />.		\|The blockchain timestamp of the theft reported by BitcoinTalk, without any timezone being specified<ref name="bitcointalklistold-20" />. The BitcoinTalk forums generally have posts with timestamps specified in UTC.
	\|-		\|-
	\|May 12, 2012		\|May 12, 2012
	\|Bitcoin.com Date Reported		\|Bitcoin.com Date Reported
	\|"On May 12, 2012, a hacker breached the Bitcoinica Rackspace server, according to the now-defunct exchange’s founder Zhou Tong."<ref name="newsdotbitcoin-7" />		\|"On May 12, 2012, a hacker breached the Bitcoinica Rackspace server, according to the now-defunct exchange’s founder Zhou Tong."<ref name="newsdotbitcoin-7" />
			\|-
			\|May 14th, 2012 6:12:46 AM MDT
			\|Bitcoin Magazine Obituary Published
			\|Vitalik Buterin via Bitcoin Magazine published an obituary of the Bitcoinica exchange<ref name="bitcoinmagazine-23" />. The Bitcoin community faced a series of setbacks, including thefts and financial stress, leading to the shutdown of Bitcoinica, a trading platform<ref name="bitcoinmagazine-23" />. Despite assurances of compensation for users, the future of the platform under Intersango's leadership remains uncertain<ref name="bitcoinmagazine-23" />. Founder Zhou Tong, though expressing faith in Bitcoin's potential for financial liberty, decided to exit the space due to a misalignment with his values, emphasizing the need to create value for society<ref name="bitcoinmagazine-23" />. While criticized for security flaws and inexperience, Zhou's endeavor reflects the ethos of Bitcoin as a realm of opportunity and innovation<ref name="bitcoinmagazine-23" />.
	\|-		\|-
	\|August 13th, 2012 11:18:00 AM MDT		\|August 13th, 2012 11:18:00 AM MDT
	\|Lawsuit Files Against Platform		\|Lawsuit Files Against Platform
	\|FinExtra reports that Bitcoinica faces a lawsuit from four former users who claim they are owed nearly $460,000 in missing funds and damages<ref name="finextra-13" />. Founded by teenager Zhou Tong, Bitcoinica suffered two hacking incidents earlier this year, resulting in the theft of thousands of Bitcoins worth tens of thousands of dollars. Despite assurances from Bitcoinica that the stolen funds were from the exchange itself, not customers, and promises to honor withdrawal requests, users allege only half of their money would be returned. With suspicions circulating that Tong might be involved in the hacks, the plaintiffs have filed a complaint in San Francisco against Bitcoinica, Intersango, and associated individuals, accusing them of conspiring to hinder and deprive the plaintiffs of their rights to the missing funds<ref name="finextra-13" />.		\|FinExtra reports that Bitcoinica faces a lawsuit from four former users who claim they are owed nearly $460,000 in missing funds and damages<ref name="finextra-13" />. Founded by teenager Zhou Tong, Bitcoinica suffered two hacking incidents earlier this year, resulting in the theft of thousands of Bitcoins worth tens of thousands of dollars. Despite assurances from Bitcoinica that the stolen funds were from the exchange itself, not customers, and promises to honor withdrawal requests, users allege only half of their money would be returned. With suspicions circulating that Tong might be involved in the hacks, the plaintiffs have filed a complaint in San Francisco against Bitcoinica, Intersango, and associated individuals, accusing them of conspiring to hinder and deprive the plaintiffs of their rights to the missing funds<ref name="finextra-13" />.
			\|-
			\|December 21st, 2012 1:53:16 AM MST
			\|BitMarket.eu Posts About Insolvency
			\|<ref name=":0" />
	\|-		\|-
	\|December 21st, 2012		\|December 21st, 2012
Line 45:		Line 53:
	\|The incident is included with specific mention in a list of bitcoin thefts which you may have forgotten about, published by news site Bitcoin.com<ref name="newsdotbitcoin-7" />.		\|The incident is included with specific mention in a list of bitcoin thefts which you may have forgotten about, published by news site Bitcoin.com<ref name="newsdotbitcoin-7" />.
	\|}		\|}

			== Technical Details ==
			The vulnerability reportedly happened through a compromised email address, which had a higher level of permissions than necessary<ref name="bitcointalklistold-20" />. The chief transaction involved in the theft is 7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8<ref name=":1" />.

			=== BitcoinTalk Summary ===
			<ref name="bitcointalklistold-20" /><blockquote>Zhou Tong, former founder of Bitcoinica, discovered an entry into Bitcoinica's Rackspace server through an excessively privileged compromised email address. This caused the theft of the entire “hot wallet”, funds stored on-site, as well as the loss of the main database. No backups were kept. Bitcoinica shut down because of this incident. The claims process is still ongoing; however, Bitcoinica is now entering receivership.</blockquote>

	== Total Amount Lost ==		== Total Amount Lost ==
	There are three different estimates of the amount lost in this case.		There are three different estimates of the amount lost in this case.

	The first value of 18547.66867623 comes from the blockchain transaction<ref>[https://www.blockchain.com/explorer/transactions/btc/7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8 Bitcoinica Theft Transaction - Blockchain.com] (Accessed Apr 1, 2024)</ref>. This is included on some sites such as BitcoinTalk<ref name="bitcointalklistold-20" />.		* The first value of 18547.66867623 comes from the blockchain transaction<ref name=":1">[https://www.blockchain.com/explorer/transactions/btc/7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8 Bitcoinica Theft Transaction - Blockchain.com] (Accessed Apr 1, 2024)</ref>. This is included on some sites such as BitcoinTalk<ref name="bitcointalklistold-20" />.
			* BitMarket.eu had a liquidation, and in the legal paperwork, they reported "about" 19980 bitcoins<ref name="bitcointalklistold-20" />.
	BitMarket.eu had a liquidation, and in the legal paperwork, they reported about 19980 bitcoins<ref name="bitcointalklistold-20" />.		* BitcoinTalk user dree12 reported a total amount affected reported to be at least 38527 bitcoin<ref name="bitcointalklistold-20" />. This is very similar to an estimate on Bitcoin.com, which reported that the exchange lost over 38,000 BTC during the spring incident, which refers to an event that breached Bitcoinica's Rackspace servers on May 12th, 2012<ref name="newsdotbitcoin-7" />.

	BitcoinTalk reported a total amount affected reported to be at least 38527 bitcoin<ref name="bitcointalklistold-20" />. This is very similar to an estimate on Bitcoin.com, which reported that the exchange lost over 38,000 BTC during the spring incident, which refers to an event that breached Bitcoinica's ~~rackspace~~ servers on May 12th, 2012<ref name="newsdotbitcoin-7" />.


Line 69:		Line 81:
	What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?		What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

			=== Zhou Tong Leaving Bitcoin ===
			Founder Zhou Tong decided to leave bitcoin entirely<ref name="bitcoinmagazine-23" />.<blockquote>“I always believe in Bitcoin, or simply anything that brings people financial liberty. I have heavily invested in Bitcoin (I purchased one 1,000 BTC gold coin from Casascius and will keep it for as long as I can).”</blockquote>Vitalik Buterin had strong praise for Zhou Tong and criticized his critics<ref name="bitcoinmagazine-23" />.<blockquote>Zhou Tong has often been reviled as a scammer, and this crisis has, predictably, only amplified such cries. But his actions over the past eight months do not paint the picture of a man who consciously set out to defraud the public with a Ponzi scheme or an arcane system of liquidation rules; rather, they paint the picture of a teenager, still uncorrupted by the rigidities of the status quo, ready to discover the world and find a place where he can make a difference. Of course, Bitcoinica’s history is marked by security blunders and telling signs of Zhou’s inexperience. However, failure is an inevitable part of learning and innovation, and if the Bitcoin community begins to treat failure as an unforgivable sin and every blunder as proof of moral turpitude, then it will cease to be a community that values learning and innovation at all. Instead, it will become yet another manifestation of the inflexible and bureaucratic status quo.</blockquote>

	=== Lawsuit Against Platform ===		=== Lawsuit Against Platform ===
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	This incident was included in many sources, including:		This incident was included in many sources, including:

			* a list compiled by BitcoinTalk user dree12<ref name="bitcointalklistold-20" />.
	* a Bitcoin Magazine infographic<ref name="bitcoinmagazine-6" /> (along with another Bitcoinica theft).		* a Bitcoin Magazine infographic<ref name="bitcoinmagazine-6" /> (along with another Bitcoinica theft).
	* Bitcoin.news lists this as one of the most controversial in the industry<ref name="newsdotbitcoin-7" />.		* Bitcoin.news lists this as one of the most controversial in the industry<ref name="newsdotbitcoin-7" />.
Line 84:		Line 99:
	There do not appear to have been any funds recovered in this case.		There do not appear to have been any funds recovered in this case.

	~~What funds were recovered? What funds were reimbursed for those affected users?~~		== Ongoing Developments ==
			There are a few potential ongoing developments.

			=== Identity Of The Hacker ===
			According to BitcoinTalk, the hacker is unknown<ref name="bitcointalklistold-20" />.

			=== Wendon Group Legal Action ===
			Venture capital group Wendon Group threatened legal action against Bitcoinica Consultancy<ref name="bitcointalklistold-20" />.

			=== New Zealand Bankruptcy ===
			A receivership in New Zealand was ongoing<ref name="bitcointalklistold-20" />.

	~~== Ongoing Developments ==~~
	~~What parts of this case are still remaining to be concluded?~~
	== General Prevention Policies ==		== General Prevention Policies ==
	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.		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.

Azoundria: 30 minutes. Reviewing all the different sources, changing titles, and moving them to appropriate sections. Review the information on BitcoinTalk and reconciling the different loss amounts and dates of the incident. Added data from teh blockchain transaction.

2024-04-01T21:02:57Z

30 minutes. Reviewing all the different sources, changing titles, and moving them to appropriate sections. Review the information on BitcoinTalk and reconciling the different loss amounts and dates of the incident. Added data from teh blockchain transaction.

Show changes

Azoundria at 20:11, 1 April 2024

2024-04-01T20:11:55Z

← Older revision		Revision as of 14:11, 1 April 2024
Line 1:		Line 1:
	{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/bitcoinicahotwallethack.php}}		{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/bitcoinicahotwallethack.php}}
	{{Unattributed Sources}}		{{Unattributed Sources}}[[File:Bitcoinica.jpg\|thumb\|Bitcoinica Logo/Homepage]]This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.

	This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.

	This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-6" /><ref name="newsdotbitcoin-7" /><ref name="finextra-13" /><ref name="bitcointalklistold-20" /><ref name="bitcoinmagazine-23" /><ref name="bitcoinwiki-24" /><ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="bitcoinexchangeguide-218" /><ref name="slowmisthacked-1160" />		This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-6" /><ref name="newsdotbitcoin-7" /><ref name="finextra-13" /><ref name="bitcointalklistold-20" /><ref name="bitcoinmagazine-23" /><ref name="bitcoinwiki-24" /><ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="bitcoinexchangeguide-218" /><ref name="slowmisthacked-1160" />

Azoundria at 16:14, 12 April 2023

2023-04-12T16:14:01Z

← Older revision		Revision as of 10:14, 12 April 2023
Line 1:		Line 1:
	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/bitcoinicahotwallethack.php}}		{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/bitcoinicahotwallethack.php}}
	{{Unattributed ~~Citations~~}}		{{Unattributed Sources}}

	This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.		This shows a definite need for hot wallet insurance. Reduction in the level of funds stored in hot wallets would reduce the risk.

	This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.		This exchange or platform is based in New Zealand, or the incident targeted people primarily in New Zealand.<ref name="bitcoinmagazine-6" /><ref name="newsdotbitcoin-7" /><ref name="finextra-13" /><ref name="bitcointalklistold-20" /><ref name="bitcoinmagazine-23" /><ref name="bitcoinwiki-24" /><ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="bitcoinexchangeguide-218" /><ref name="slowmisthacked-1160" />
	<ref name="bitcoinmagazine-6" /><ref name="newsdotbitcoin-7" /><ref name="finextra-13" /><ref name="bitcointalklistold-20" /><ref name="bitcoinmagazine-23" /><ref name="bitcoinwiki-24" /><ref name="kylegibson-86" /><ref name="bitcointalklist-87" /><ref name="bitcoinexchangeguide-218" /><ref name="slowmisthacked-1160" />

	== About Bitcoinica ==		== About Bitcoinica ==
Line 45:		Line 44:
	!Description		!Description
	\|-		\|-
	\|May 1st, 2012 12:00:08 AM		\|May 1st, 2012 12:00:08 AM MDT
	\|Main Event		\|Main Event
	\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
Line 72:		Line 71:
	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
			== General Prevention Policies ==
			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.
			== Individual Prevention Policies ==
			{{Prevention:Individuals:Placeholder}}

			{{Prevention:Individuals:End}}

	== Prevention Policies ==		== Platform Prevention Policies ==
	~~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.~~		{{Prevention:Platforms:Placeholder}}

			{{Prevention:Platforms:End}}

			== Regulatory Prevention Policies ==
			{{Prevention:Regulators:Placeholder}}

			{{Prevention:Regulators:End}}

	== References ==		== References ==
	<references><ref name="bitcoinmagazine-6">[https://bitcoinmagazine.com/articles/infographic-overview-compromised-bitcoin-exchange-events Infographic: An Overview of Compromised Bitcoin Exchange Events] (Jan 29, 2020)</ref>		<references><ref name="bitcoinmagazine-6">[https://bitcoinmagazine.com/articles/infographic-overview-compromised-bitcoin-exchange-events Infographic: An Overview of Compromised Bitcoin Exchange Events] (Jan 30, 2020)</ref>

	<ref name="newsdotbitcoin-7">[https://news.bitcoin.com/bitcoin-exchange-thefts-forgotten/ The Bitcoin Exchange Thefts You May Have Forgotten \| Featured Bitcoin News] (Jan 28, 2020)</ref>		<ref name="newsdotbitcoin-7">[https://news.bitcoin.com/bitcoin-exchange-thefts-forgotten/ The Bitcoin Exchange Thefts You May Have Forgotten \| Featured Bitcoin News] (Jan 29, 2020)</ref>

	<ref name="finextra-13">[https://www.finextra.com/newsarticle/23973/users-sue-bitcoin-exchange-over-460k-in-missing-funds Users sue Bitcoin exchange over $460k in missing funds] (Feb 2, 2020)</ref>		<ref name="finextra-13">[https://www.finextra.com/newsarticle/23973/users-sue-bitcoin-exchange-over-460k-in-missing-funds Users sue Bitcoin exchange over $460k in missing funds] (Feb 3, 2020)</ref>

	<ref name="bitcointalklistold-20">[https://bitcointalk.org/index.php?topic=83794.msg923918#post_toc_27 <nowiki>List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses [Old]</nowiki>] (Jan 27, 2020)</ref>		<ref name="bitcointalklistold-20">[https://bitcointalk.org/index.php?topic=83794.msg923918#post_toc_27 <nowiki>List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses [Old]</nowiki>] (Jan 28, 2020)</ref>

	<ref name="bitcoinmagazine-23">[https://bitcoinmagazine.com/articles/bitcoinica_an_obituary-1336979566 Bitcoinica: An Obituary] (Feb 3, 2020)</ref>		<ref name="bitcoinmagazine-23">[https://bitcoinmagazine.com/articles/bitcoinica_an_obituary-1336979566 Bitcoinica: An Obituary] (Feb 4, 2020)</ref>

	<ref name="bitcoinwiki-24">[https://en.bitcoin.it/wiki/Bitcoinica Bitcoinica - Bitcoin Wiki] (Feb 3, 2020)</ref>		<ref name="bitcoinwiki-24">[https://en.bitcoin.it/wiki/Bitcoinica Bitcoinica - Bitcoin Wiki] (Feb 4, 2020)</ref>

	<ref name="kylegibson-86">[https://medium.com/@kylegibson/100-crypto-thefts-a-timeline-of-hacks-glitches-exit-scams-and-other-lost-cryptocurrency-873c87fd5522 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents] (Jan 25, 2020)</ref>		<ref name="kylegibson-86">[https://medium.com/@kylegibson/100-crypto-thefts-a-timeline-of-hacks-glitches-exit-scams-and-other-lost-cryptocurrency-873c87fd5522 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents] (Jan 25, 2020)</ref>
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	<ref name="bitcoinexchangeguide-218">[https://bitcoinexchangeguide.com/bitcoin/scams-hacks/ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com] (Mar 5, 2020)</ref>		<ref name="bitcoinexchangeguide-218">[https://bitcoinexchangeguide.com/bitcoin/scams-hacks/ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com] (Mar 5, 2020)</ref>

	<ref name="slowmisthacked-1160">[https://hacked.slowmist.io/en/?c=Exchange SlowMist Hacked - SlowMist Zone] (Jun 25, 2021)</ref></references>		<ref name="slowmisthacked-1160">[https://hacked.slowmist.io/en/?c=Exchange SlowMist Hacked - SlowMist Zone] (Jun 26, 2021)</ref></references>