As online crypto-currency Bitcoin becomes more popular, downsides to the largely anonymous financial unit are appearing. An Australian man who owned over 4,100 Bitcoins (with a value of approximately £650,000) was relieved of his virtual funds after hackers targeted his Bitcoin transfer service.
The man, who appeared on Australia’s ABC News using his online screen name, had stored the Bitcoins in his Australian ‘e-wallet’ website. He believes that the virtual currency was stolen from his online wallet by a team of hackers in two separate attacks.
When quizzed, the man claimed that he would not be able to report the theft to the local police due to the issues in tracking the online crypto-currency. Some users of the online wallet service have speculated that the theft could be an ‘inside job’ that occurred with the victim’s direct involvement.
Bitcoin has grown into an immensely popular crypto-currency over the past three years, earning multi-million dollar fortunes for some and financial ruin for many others. The currency is completely anonymous, making it a target for fraudsters.
It’s also emerged as a key concern for financial regulators and law enforcement, who believe that the online crypto-currency could be used for money laundering. Earlier this year, online drug distributor Dread Pirate Roberts was charged with running an online drug market using the anonymous crypto-currency to process payments.
TradeFortress, the user targeted in the recent hacking attack, claims that users of the online crypto-currency should avoid storing their Bitcoins on devices connected to the Internet. Security issues with third-party services, such as stolen password lists and database intrusions, compromise the currency’s strong security systems.
Despite concerns about the currency’s security, the price of Bitcoin has steadily risen over the past week as users rushed to purchase Bitcoins as both short and long-term investments.
