Bitcurex Targeted by Hacking

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Bitcurex Logo/Homepage

The Bitcurex platform featured a magical money duplication “feature”. The hacker used their “magic money” to purchase all the bitcoin on the platform. It appears they managed to make off with 1,323 bitcoin before the issue was discovered. The exchange continued operation after this hack without revealing what had happened to any customers.

About Bitcurex

Bitcurex was a European bitcoin exchange established in 2012 and headquartered in Łódź, Poland, supports trading in PLN, EUR, and USD. Initially introduced on the BitcoinTalk forum in July 2012, the exchange offers high transaction limits for both verified and unverified users, with verification processes completed within 24 hours and allowing for unrestricted trading in various currencies.

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The Reality

There is limited motivation and significant risk for a platform to disclose a breach. The likely outcome of such a disclosure is that customers will panic and large-scale withdrawals will ensue.

What Happened

The Bitcurex platform was hacked and 1,323 bitcoin were stolen.

Key Event Timeline - Bitcurex Targeted by Hacking

Date	Event	Description
February 25th, 2014 8:52:00 AM MDT	Report About Mt. Gox	Bitcurex publishes an official statement about the hacking situation with Mt. Gox on their Facebook page. While the full statement has been lost to time, it starts out with "In recent months our team has been paying close attention to the situation of Mt.Gox. We have been following all statements coming from Japan regarding problems with functioning of that exchange service. Out of concern for the safety of transactions made by our customers and their funds gathered in…"
March 14th, 2014 2:31:00 AM MDT	Average Price Spike Notice	Reddit user mercer22 reports that there was a notification of a large spike in the average price of bitcoin.
March 14th, 2014 2:36:00 AM MDT	Blocked Within 5 Minutes	Reddit users report that trading was shut off on the platform within 5 minutes of the attack starting.
March 14th, 2014 2:37:40 AM MDT	Reddit Discussion Of Hack	A Reddit discussion suspecting the hack is shared. A user on Reddit pointed out an unusual transaction of 19,000 BTC on the exchange, suggesting the potential misuse of hacked fiat currency to buy Bitcoin. Speculation ensued regarding the nature of the attack and the security measures in place. Discussions highlighted the risks associated with centralized exchanges and the importance of personal wallet security in the Bitcoin ecosystem. The incident sparked debate on the vulnerability of cryptocurrency exchanges and the need for improved security measures to protect users' funds.
March 14th, 2014 3:37:00 AM MDT	Initial Facebook Announcement	Bitcurex assured users on Facebook that their funds were safe and that the exchange was temporarily shut down for security reasons. At 9:37 AM local time on this Friday in Poland, The Bitcurex platform posts a notification on Facebook in Polish that they had temporarily suspended the website for verification purposes and that they will provide further appropriate information after the verification is complete.
March 14th, 2014 4:06:00 AM MDT	Announcement Posted In English	Bitcurex posts an announcement in English that they "decided to temporarily shut down [thei]r service" due "to an error and ongoing maintenance works".
March 14th, 2014 7:45:00 AM MDT	Security Procedure Announcement	The Bitcurex posts that "funds are safe". The website has reportedly been disabled as part of security procedures.
March 14th, 2014 8:16:20 AM MDT	Platform Shutdown Reported	NewsBTC reports that the Bitcurex platform had shut down. Bitcurextemporarily halted trading due to issues that initially seemed unrelated to a hack. However, the company later revealed that they had successfully blocked a hacking attempt, which resulted in only a portion of funds stored in the operational Hot Wallet being defrauded. The majority of funds from the Hot Wallet, as well as all funds from the Cold Wallet and FIAT monetary funds, remained secure. Although the exact amount lost was not disclosed, Bitcurex assured that it was manageable and only a part of their Hot Wallet was affected. They have since identified and removed the source of the problem but cannot specify when trading will resume. An external audit is currently underway to further investigate the incident, and updates will be provided as more information becomes available.
March 14th, 2014 8:23:00 AM MDT	English Safety Procedures	Bitcurex posts an update in English that "funds are secure" and the "current shutdown results from safety procedures".
March 14th, 2014 8:52:40 AM MDT	CoinDesk Article Published	CoinDesk publishes an article reporting on the Bitcurex hack. Poland's leading bitcoin exchange, Bitcurex, faced a temporary shutdown due to a hacking attack targeting funds in users' bitcoin wallets. The exchange announced the site closure on Facebook, attributing it to an "error and ongoing maintenance works." Bitcurex staff emphasized the closure was necessary for IT verification. Despite assurances of optimism from company representatives, the incident stirred concerns among users and cryptocurrency forums. Bitcurex later released a statement confirming the hacking attempt, stating they successfully blocked it but acknowledged a portion of funds from the operational Hot Wallet was compromised. While specific figures regarding the stolen bitcoins were not disclosed, estimates from user accounts and screenshots hinted at significant losses, with offers totaling millions of dollars. This attack came after Bitcurex's efforts to reassure users following the Mt.Gox meltdown, emphasizing their commitment to security. The incident reflects broader challenges faced by cryptocurrency exchanges regarding security vulnerabilities, as evidenced by previous attacks on Poland-based exchanges like Bidextreme.pl. Established in 2012, Bitcurex operates from Łódź, Poland, under Digital Future Ltd.
March 14th, 2014 10:27:00 AM MDT	Further Polish Explanation	Bitcurex posts an update on Facebook that they have successfully stopped a hacking attack on Bitcurex, preventing significant theft of BTC funds. Most funds in our Hot Wallet, as well as all Cold Wallet and FIAT funds, are safe. Our team has resolved the issue and is working on resuming service. We'll update you on the full restoration date soon. Thank you for your support. .
March 16th, 2014 10:45:05 AM MDT	Reddit Discussion	The current situation and announcements are discussed as part of the "Daily Discussion" on Reddit.
March 14th, 2014 11:08:00 AM MDT	Further English Explanation	The update is posted in English as well.
March 14th, 2014 11:31:05 AM MDT	Follow Up Statement	NewsBTC reports that Bitcurex has issued a follow up statement. In a follow-up statement, the company says they “successfully blocked a hacking attack,” adding that “Thanks to automatic safety procedures, hackers manages to defraud only a portion of the funds stored in operational Hot Wallet Bitcurex.”
March 14th, 2024 12:40:00 PM MDT	CoinTelegraph Article Posted	CoinTelegraph reports that the Bitcurex attack prompted swift action from administrators. Initially, a Facebook post blamed errors without disclosing the hack to prevent panic among users. Subsequently, Bitcurex announced that automatic safety measures had thwarted the attack, preserving most funds. Despite ongoing cyber threats, the exchange expressed gratitude for community support and pledged to resume operations, emphasizing strengthened defenses against future attacks.
March 15th, 2014 7:06:00 AM MDT	Progress Update Polish	Bitcurex posts an update that the IT work is almost complete and testing of the modified system is scheduled for that evening. Users should expect an exact date for the relaunch once the audit is completed.
March 15th, 2014 7:46:00 AM MDT	Progress Update English	An English version of the same update was posted.
March 17th, 2014 11:40:42 PM MDT	CCN Article On Relaunch	CCN reports that the Bitcurex platform has relaunched successfully. Bitcurex has resumed operations following a major hacking attempt that threatened the security of the exchange. After halting trades to investigate the attack, Bitcurex confirmed that a malicious user had attempted to acquire 19,000 BTC through a fraudulent buy order, but the site was swiftly shut down to prevent further damage. In a statement, Bitcurex reassured users that only a portion of funds from the Hot Wallet were affected, with the majority of funds from both the Hot Wallet and the Cold Wallet remaining secure. The exchange pledged to restore normal service and conduct an external audit to ensure future security. True to their word, Bitcurex resumed PLN operations on March 18 and promised to restore EUR operations on March 20. Additionally, they committed to covering hot wallet losses and reset all user passwords for added security. While prices initially dipped upon the exchange's return, they are gradually stabilizing. This swift response to the hacking attempt demonstrates Bitcurex's ability to effectively manage crises and maintain user trust, in contrast to past incidents like Mt. Gox. Further updates can be found on the Bitcurex website and Facebook page.
March 18th, 2014 12:56:00 PM MDT	CoinDesk Article On Relaunch	CoinDesk reports that Bitcurex resumed service on March 18th, implementing new security measures to safeguard user funds after the hack. Despite the breach, the hackers failed to fully access the exchange's operational hot wallet. Bitcurex assured users that losses, estimated at 10 to 20% of the hot wallet, were covered by the company's funds, with no fee increases or additional restrictions imposed. The exchange reported the attack to authorities and cautioned against using similar-sounding domain names. Bitcurex also announced plans for further security enhancements and development in the coming weeks.
June 2nd, 2014 9:23:00 AM MDT	Chris Skinner List Inclusion	Chris Skinner reports that "[t]his week, Bitcurex, a Polish bitcoin exchange, closed its doors temporarily after a hack brought down its Zloty and Euro exchanges. The company lost “between 10 and 20%” of funds, according to a statement, but plans to re-open shortly.". It seems like his statement may be outdated based on the time of the hack, or perhaps there was a second attack not as widely reported.
October 2016	Bitcurex Shuts Down	"In October 2016, the troubled bitcoin exchange shut down its exchange operations after losing 2300 bitcoins (approx. $1.5 million at the time), citing an “external interference in automated data collection and processing of information”. Digital Future, the exchange platform’s operator, claimed to have filed a report with the Łódź district prosecutor’s office of the losses it suffered."
November 30th, 2016	Claimed Relaunch Date	"The notice indicated services to resume on or before November 30, 2016. The operator claimed to ink a recapitalization agreement with an investor to resume services and allow users to withdraw funds." The relaunch did not happen as promised.
March 16th, 2017 12:35:05 PM MDT	CCN Article On Investigation	CCN reports that the District Prosecutor’s Office in Łódź, Poland, has initiated an investigation into Bitcurex, the country's first bitcoin exchange, which ceased operations in October 2016 after losing 2300 bitcoins. Despite claims of a recapitalization agreement with an investor to resume services, Bitcurex has remained offline, prompting the prosecutor's office to oversee an investigation into the losses suffered by users. This move comes amid Poland's generally favorable stance towards bitcoin and blockchain technology, with the government showing interest in cooperation with the industry for the future of cryptocurrencies.
December 18th, 2017 6:01:07 PM MST	Cyber Defense Magazine	The incident is included in a list compiled by the Cyber Defense Magazine.
December 28th, 2023 6:21:00 PM MST	Entry Added To 0xLino Rekt List	An entry for Bitcurex is added to a list of "crypto rekts" run by 0xLino.

Technical Details

It appears that the hacker was able to obtain a large quantity of fiat currency, which they then used to purchase bitcoins. The attacker was successfully able to take a portion of the funds in the Bitcurex hot wallet before the platform detected the anomalies and shut off withdrawals.

Bitcurex describes the issue as "an error" in their platform. Further details about the exploit do not appear to have been published.

Total Amount Lost

The total amount lost has been estimated at $844,000 USD.

Immediate Reactions

Reddit users report that trading was shut off on the platform within 5 minutes of the attack starting, which Bitcurex reports was due to automated security procedures. An initial Facebook post blamed errors without disclosing the hack to prevent panic among users. Subsequently, Bitcurex announced that automatic safety measures had thwarted the attack, preserving most funds. The Bitcurex platform reported and updated users regularly through social media via their Facebook account.

Reddit Community Discussions

A Reddit discussion suspecting the hack was shared before any official announcements took place. A user on Reddit pointed out an unusual transaction of 19,000 BTC on the exchange and that the price had increased massively, suggesting the potential misuse of hacked fiat currency to buy Bitcoin. Speculation ensued regarding the nature of the attack and the security measures in place. Despite concerns, some users expressed confidence in Bitcurex's ability to handle the situation effectively. Discussions highlighted the risks associated with centralized exchanges and the importance of personal wallet security in the Bitcoin ecosystem. The incident sparked debate on the vulnerability of cryptocurrency exchanges and the need for improved security measures to protect users' funds.

Facebook Announcements Throughout the Process

An initial announcement was first posted in Polish.

Dear Users,

Due to the irregularities, we have temporarily suspended the website for verification purposes. After its completion, we will provide you with appropriate information.

Kind regards,

Bitcurex Team

Within an hour an announcement was also posted in English.

Dear Users,

Due to an error and ongoing maintenance works, we decided to temporarily shut down our service. Further information coming soon.

Regards,

Bitcurex Team

A few hours later, an update was posted in Polish.

Dear Users,

Work is underway to restore the operation of the website. At the same time, we would like to inform you that your funds are safe - the website has been disabled as part of security procedures. We will provide you with further, more detailed information in the near future.

Kind regards,

Bitcurex Team

Followed by an English variant of the update.

Dear Users,

We are working on resuming our service. We would like to inform you that your funds are secure - current shutdown results from safety procedures. We will soon provide you with further, more detailed information.

Regards,

Bitcurex Team

Details of the attack were posted in Polish.

Dear Users,

We managed to thwart a hacker attack on the Bitcurex website, preventing the mass theft of our users' BTC funds. Thanks to automatic security procedures, the hackers managed to embezzle only part of the funds stored on the operational Bitcurex Hot Wallet. Most of the funds present in the Hot Wallet, as well as all of the funds in the Cold Wallet and FIAT cash, remained intact.

Our team located and removed the source of the problem. Work is underway to resume the website, and an external audit is being conducted in parallel: we will soon provide you with the exact date of relaunch of all Bitcurex functionalities. We will provide you with more information in subsequent communications.

We apologize for any inconvenience and, above all, we would like to thank the entire BTC community for their support: we are coming out of this trial stronger.

Kind regards,

Bitcurex Team

As with the others, the update was translated to English.

Dear Users,

We successfully blocked a hacking attack on Bitcurex, preventing mass theft of BTC funds of our users. Thanks to automatic safety procedures, hackers managed to defraud only a portion of the funds stored in operational Hot Wallet Bitcurex. The majority of funds from Hot Wallet, as well the entirety of funds from Cold Wallet and FIAT monetary funds remained intact.

Our team located and removed the source of the problem. We are working on resuming normal service, at the same time an external audit is being conducted: we will soon provide the exact date of resuming all Bitcurex functionalities. More information will be provided in further statements.

We are sorry for the inconvenience, and most of all we thank the whole BTC community for the support we received: we were put to a test that will make us stronger.

Best regards,

Bitcurex Team

A further update was provided the next day in Polish and English.

Dear Users,

IT works are almost completed. Internal tests of the modified system are planned today in the evening, after which a final external audit will be carried out. After its positive completion, we will publish a message in which we will provide you with the exact launch date of the website and all necessary details.

Thank you once again for your patience and trust - it means a lot to our entire team.

Kind regards,

Bitcurex Team

An update was posted on the website.

Dear Users,

First of all, we would like to thank all of you for your patience and understanding that you have shown during the last couple of dozen hours. We thank all our Users from Poland and abroad who contacted us and stressed their faith in resolving this situation in an positive way, despite the black scenarios that everybody must have thought about.

We are proud to inform you that we are resuming our service with all its functionalities on March 18 (Tuesday) at the latest. We will inform you about the exact hour of resuming the service soon. The service will be brought back to its state from before the attack using the backup copies.

The thief did not manage to break our security measures protecting your accounts nor gain full access to operational Hot Wallet Bitcurex. Thanks to our safety procedures, after the initial non- authorised transactions, the thief was prevented from making any further operations. Then the service was shut down to carry out repair works and implement the necessary improvements to our system.

Our internal procedures prevented any further losses, which were limited to between 10 and 20 percent of our operational Hot Wallet Bitcurex. Because of realistic chances of filing criminal charges against those who are responsible, in order to allow an effective official investigation, we prefer not to disclose details that could facilitate destroying evidence.

All the incurred losses were covered from the funds gathered by Digital Future – the owner of Bitcurex. Our fees will not be raised, nor will we introduce any other restrictions.

Ultimate Outcome

The Bitcurex platform claimed to cover all losses. Despite ongoing cyber threats, the exchange expressed gratitude for community support and pledged to resume operations, emphasizing strengthened defenses against future attacks. The exchange continued to operate until October 2016, when another hack brought down the platform.

Improvements To Platform Security

The exchange tightened security measures following the hack, implementing proprietary features to safeguard users' data and funds. Despite this incident, Bitcurex continues to maintain a portion of users' funds in a hot wallet.

Inclusion/Recognition In Lists

The incident is included in a list compiled by the Cyber Defense Magazine.

Total Amount Recovered

The Bitcurex platform continued to operate and claimed that they would fully cover all losses. Bitcurex assured users that losses, estimated at 10 to 20% of the hot wallet, were covered by the company's funds, with no fee increases or additional restrictions imposed. The platform continued to operate until 2016, when another hack ultimately resulted in closure.

Ongoing Developments

The events around the closure of the Bitcurex platform may be the subject of investigation by Polish authorities.

Individual Prevention Policies

When using any third party custodial platform (such as for trading), it is important to verify that the platform has a full backing of all assets, and that assets have been secured in a proper multi-signature wallet held by several trusted and trained individuals. If this can't be validated, then users should avoid using that platform. Unfortunately, most centralized platforms today still do not provide the level of transparency and third party validation which would be necessary to ensure that assets have been kept secure and properly backed. Therefore, the most effective strategy at present remains to learn proper self custody practices and avoid using any third party custodial platforms whenever possible.

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

All aspects of any platform should undergo a regular validation/inspection by experts. This validation should include a security audit of any smart contracts, reporting any risks to the backing (of any customer assets, ensuring treasuries or minting functions are properly secured under the control of a multi-signature wallet, and finding any inadequacies in the level of training or integrity of the team. The recommended interval is twice prior to launch or significant system upgrade, once after 3 months, and every 6 months thereafter. It is recommended that the third party performing the inspection not be repeated within a 14 month period.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.

Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.