108  Blockchain

incorrect withdrawal code of the exchange. There is still some speculation

on the amount of the hack and whether it was a hack or an inside job.

• In November 2013, a Czech Republic-based crypto exchange called

BitCash was hacked losing 484 BTC. The hackers gained access to

email servers and sent out phishing scam emails, pretending to be

BitCash to obtain customer information, which they used to steal

funds worth 484 BTC.

• In May 2013, a cryptocurrency exchange called Vicurex was hacked

losing about 1,454 BTC (the exchange has not confirmed the amount).

Vicurex claimed bankruptcy and froze all withdrawals, leading several

former customers to sue the company for withholding their money.

• In September 2012, a US-based cryptocurrency exchange called

BitFloor was hacked for 24,000 BTC. The hackers managed to gain

access to the exchange servers and found unencrypted backup wallet

keys. Once hackers had access to private keys, they simply withdrew

the funds worth $250,000 at the time of the hack.

• In May 2012, a cryptocurrency exchange called Bitcoinica was hacked

whereby hackers took away 18,457 BTC. Bitcoinica was unlucky

as it was a second hacking incident for them after the initial attack

2 months earlier. It appears the original security issues highlighted by

the first attack (from the Linode attack) were never effectively dealt

with. The exchange site was immediately shut down and the exchange

was ultimately closed for good.

• In March 2012, Bitcoinica and Slush cryptocurrency exchange was

hacked. They were the victim of security flaws with their hosting pro-

vider called Linode. Linode was a web hosting provider and hosted

the cryptocurrency exchanges Bitcoinica and Slush. Hackers compro-

mised hosting provider Linode infrastructure and stole 43,000 BTC

from Bitcoinica and 3,000 BTC from Slush.

• In June 2011, the MT.Gox cryptocurrency exchange was hacked. It

appears to be the beginning of problems for MT.Gox. In this incident,

hackers were able to gain access to a computer belonging to an audi-

tor at the cryptocurrency exchange. Hackers were able to change the

price of Bitcoin to $0.01, managed to purchase the BTC at the artifi-

cially low price and made off a fortune with 2,643 BTC.

• In October 2011, a cryptocurrency exchange called Bitcoin7 was hacked

whereby hackers nearly stole 11,000 BTC from the exchange. Hackers

from Russia and eastern Europe managed to gain access to Bitcoin7’s

servers. This gave them access to the exchange’s main BTC depository

and two backup wallets. Bitcoin7 still exists with an obvious spammy

website, so please be aware and stay miles away from them.

To summarise and conclude on cryptocurrency fraud and scams, the fol-

lowing points are worth highlighting: