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Author Topic: Coinapult Claims $40k Lost in Hot Wallet Compromise  (Read 1462 times)
inBitweTrust
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March 18, 2015, 01:22:21 AM
 #1

There are security risks when you centralize private key storage whether it is an encrypted database of credit cards or bitcoin private keys:

http://www.coindesk.com/coinapult-loses-40k-hot-wallet-compromise/

The message is clear that people need to use exchanges and payment processors as gateways and not a place of storing their assets.

Secure your bitcoins yourself:

https://bitcointalk.org/index.php?topic=858604.0

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March 18, 2015, 01:49:04 AM
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At least this time no costumer funds were lost and Coinapult is able to survive with the loss, others were not so luck.
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March 18, 2015, 01:50:51 AM
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Well hey, at least it's a relatively low (in comparison to other breaches) amount of bitcoins lost to the hackers this time and hopefully the company will learn from it and come back bigger, better & even more secure.
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March 18, 2015, 01:53:06 AM
 #4

Blincoe told CoinDesk:

    “Our team is looking into all possible scenarios in regards to what happened.”


It is a very short read, and I hope they are able to fully recover soon.

inBitweTrust
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March 18, 2015, 01:59:41 AM
 #5

I have nothing against Coinapult and wish them best but one concern I have lately with these hacks that are either partially recovered or "don't effect customer funds" (bitstamp, coinapult, ect..)is that it could be setting future clients up under either a premeditated scam or the operation doesn't really back up all their clients assets and are running as a fractional reserve operation.

Coinapult seems to be pumping their "locks" feature which encourages users to trust them to store both their bitcoins and fiat in a centrally controlled company. This is not a safe or advisable thing we should be encouraging users to do.

By all means use them as an exchange or payment processor.... but secure your bitcoins yourself.

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March 18, 2015, 02:09:25 AM
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At least this time no costumer funds were lost and Coinapult is able to survive with the loss, others were not so luck.

Some customer funds might have been in the hot wallet but they will be refunded if that's the case.

Bitmixer sucks

Bit-X sucks
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March 18, 2015, 02:19:12 AM
 #7

My main concern is how these exchanges have $40k worth of their own funds in the first place that, operationally, they can "get by" without... how are these guys making so much money in the first place?  Roll Eyes
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March 18, 2015, 02:23:17 AM
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My main concern is how these exchanges have $40k worth of their own funds in the first place that, operationally, they can "get by" without... how are these guys making so much money in the first place?  Roll Eyes

Look at the invest funding many of these bitcoin companies receive. Into the millions.

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March 18, 2015, 04:47:11 AM
 #9

I guess Voorhees ran out of the FeedZBirds Bitcoins. Time for a fresh injection of cash. lol

http://upstart.bizjournals.com/money/loot/2013/09/04/erik-voorhees-of-satoshidice-coinapult.html?page=all

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March 18, 2015, 04:51:43 AM
 #10

https://bitcointalk.org/index.php?topic=956768.msg10468445

Ron~Popeil
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March 18, 2015, 05:09:51 AM
 #11

If they are not passing the loss on to users I tend to think it was a genuine hack. Take some of those funds and invest them in a good security team. It will pay for itself over time.

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March 18, 2015, 06:32:42 AM
 #12

The security of bitcoin is still the biggest problem to make it going to mainstream. Bitcoin itself is more security than any bank account, but it's very complex to keep it security.
inBitweTrust
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March 18, 2015, 07:19:24 AM
 #13

I guess Voorhees ran out of the FeedZBirds Bitcoins. Time for a fresh injection of cash. lol

http://upstart.bizjournals.com/money/loot/2013/09/04/erik-voorhees-of-satoshidice-coinapult.html?page=all

Little out of date.
From what I understand he left coinapult https://coinapult.com/about a while ago and is now running a very successful shapeshift - http://www.coindesk.com/shapeshift-raises-525k-reveals-erik-voorhees-as-creator/

I guess Voorhees ran out of the FeedZBirds Bitcoins.

Weird... is he still suggesting that FeedZBirds is still a yet to be completed project?

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March 18, 2015, 08:17:17 AM
 #14

CoinApult already survived this... nothing to worry about, plus, they already updated their wallets and it seems even more secure now.

Legit projects only!
AtheistAKASaneBrain
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March 18, 2015, 01:04:08 PM
 #15

The security of bitcoin is still the biggest problem to make it going to mainstream. Bitcoin itself is more security than any bank account, but it's very complex to keep it security.

Bitcoin itself is god, the problem is the exchanges and services are run by humans, prone to corruption.


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Ron~Popeil
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March 18, 2015, 03:11:20 PM
 #16

The security of bitcoin is still the biggest problem to make it going to mainstream. Bitcoin itself is more security than any bank account, but it's very complex to keep it security.


I don't think securing a personal stash is complicated. People become accustomed to having banks babysit their fiat wealth and naturally that habit extends to their bitcoin holdings. Getting people to take responsibility for their own private keys is quite complicated. 

acquafredda
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March 18, 2015, 03:19:28 PM
 #17

There are security risks when you centralize private key storage whether it is an encrypted database of credit cards or bitcoin private keys:

http://www.coindesk.com/coinapult-loses-40k-hot-wallet-compromise/

The message is clear that people need to use exchanges and payment processors as gateways and not a place of storing their assets.

Secure your bitcoins yourself:

https://bitcointalk.org/index.php?topic=858604.0

It's an old excuse so far.

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kingcolex
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March 18, 2015, 03:38:25 PM
 #18

There are security risks when you centralize private key storage whether it is an encrypted database of credit cards or bitcoin private keys:

http://www.coindesk.com/coinapult-loses-40k-hot-wallet-compromise/

The message is clear that people need to use exchanges and payment processors as gateways and not a place of storing their assets.

Secure your bitcoins yourself:

https://bitcointalk.org/index.php?topic=858604.0

It's an old excuse so far.
Yeah, I just stopped believing these, too much temptation for people to steal and blame it on a hack that you never know what's true anymore. There must be a reason that Coinbase doesn't get hacked and just follow their footsteps of security if you're an exchange.

inBitweTrust
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March 18, 2015, 03:59:11 PM
 #19

I absolutely dread the day when btc-e gets "hacked" and we have to deal with another Mtgox level shitstorm. If we can keep repeating these warnings hopefully a small percentage of people will take our advice and protect their investments properly.

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March 18, 2015, 04:02:09 PM
 #20

The security of bitcoin is still the biggest problem to make it going to mainstream. Bitcoin itself is more security than any bank account, but it's very complex to keep it security.

Most if not all Bitcoin exchanges do not have millions to pay security professionals each month code a nice backend that is bulletproof against hack attempts. Cold storage would definitely help with the storage though.
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