BIPS Wallet Service
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In the earlier days of bitcoin adoption, these kinds of custodial wallet services were actually in use, and users were storing their funds in what was essentially a hot wallet managed by a third party. Although some reporting here suggests that only a portion of the funds were stolen, there does not appear to be any indication that any of the affected users got anything back.
This exchange or platform is based in Denmark, or the incident targeted people primarily in Denmark.[1][2][3][4][5][6]
About BIPS
“A few weeks after Inputs.io,” “Europe’s primary bitcoin payment processor for merchants and free online wallet service, BIPS, was the target of a major DDoS attack and subsequent theft in the past few days that saw 1,295 BTC (just over $1m on CoinDesk’s BPI) stolen.” “BIPS lost 1,295 bitcoin from its own accounts, as well as money from “several” consumer wallets. The company disclosed the theft rather quicker than Inputs.io did, but still waited 11 days from the first hack attempt to finally telling customers that they had lost money. In that time, the value of the stolen bitcoins rose from $650,000 to over $1m – though by the end of December, the third bitcoin bubble had popped, and the value had fallen back down to $690,000.” “The Copenhagen, Denmark-based company was targeted on 15th November by a massive DDoS attack. Then on 17th November, it was followed up by a subsequent attack that disabled the site and “overloaded our managed switches and disconnected the iSCSI connection to the SAN on BIPS servers”. “Regrettably, despite several layers of protection, the attack caused vulnerability to the system, which has then enabled the attacker/s to gain access and compromise several wallets,” the company said in a written statement.” “BIPS uses an algorithm, based on supply and demand, to work out the amount of bitcoins it needs to keep it in a ‘hot wallet’. The heist, however, was apparently not due to any vulnerability in the code itself.” “Most balances left are minuscule, but if you had more than a few satoshi’s in your wallet you are affected, and will be contacted.” “The stolen bitcoins are on the move after sitting idle at 1LuG91tcSQxKj32BsCoRkX7yQLfj9LtkCs for 1.5 years”
This exchange or platform is based in Denmark, or the incident targeted people primarily in Denmark.
The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.
Include:
- Known history of when and how the service was started.
- What problems does the company or service claim to solve?
- What marketing materials were used by the firm or business?
- Audits performed, and excerpts that may have been included.
- Business registration documents shown (fake or legitimate).
- How were people recruited to participate?
- Public warnings and announcements prior to the event.
Don't Include:
- Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
- Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.
The Reality
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
- When the service was actually started (if different than the "official story").
- Who actually ran a service and their own personal history.
- How the service was structured behind the scenes. (For example, there was no "trading bot".)
- Details of what audits reported and how vulnerabilities were missed during auditing.
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.
| Date | Event | Description |
|---|---|---|
| November 1st, 2013 12:00:25 AM MDT | Main Event | Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. |
Total Amount Lost
The total amount lost has been estimated at $650,000 USD.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Total Amount Recovered
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
What parts of this case are still remaining to be concluded?
General Prevention Policies
Coming soon.
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ 100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25, 2020)
- ↑ List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses (Feb 15, 2020)
- ↑ Bitcoin Payment Processor BIPS Attacked, Over $1 Million Stolen (Feb 29, 2020)
- ↑ Second major Bitcoin heist this month allegedly takes over $1 million - The Verge (Feb 29, 2020)
- ↑ BIPS Wallet security breach (Feb 29, 2020)
- ↑ Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5, 2020)