Coinapult Claims $40k Lost in Hot Wallet Compromise

[inBitweTrust]

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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[Cthulhu]

At least this time no costumer funds were lost and Coinapult is able to survive with the loss, others were not so luck.

[Grumpster]

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.

[Bit_Happy]

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]

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.

[bitcoin_bagholder]

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.

[Grumpster]

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? 

[bitcoin_bagholder]

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? 

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

[QuestionAuthority]

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

[gadman2]

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

[Ron~Popeil]

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.

[Agestorzrxx]

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]

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?

[rememberme]

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

[AtheistAKASaneBrain]

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.

[Ron~Popeil]

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]

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.

[inBitweTrust]

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.

[kepo07]

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.

[inBitweTrust]

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.

If an exchange cannot afford 80k a year to pay for one decent security expert than they don't deserve to exist.

If an exchange is insured, pays for top notch security, and highly regulated the best outcome you can hope for is guaranteed theft from the state between 15-40%, Otherwise you should expect to lose all your money within enough time.

Better secure bitcoins yourself and use bitcoin as intended.