$240 000 USD





“Leading U.S. Bitcoin exchange Bitfloor was breached in September of 2012, losing over 24,000 BTC during the incident. Bitfloor explained at the time that the exchange’s hot wallet data was mistakenly held on the company’s servers which led to the hack. No bitcoins were returned to customers after the hack even though the company resumed trading and promised restitution. “As funds are available for repayment, they will be dispersed on a pro-rated basis,” explained Bitfloor’s founder and operator Roman Shtylman. However, according to the company, Bitfloor’s banks had ceased doing business with the startup and customers never saw their funds again.” “It all started when the exchange’s server crashed, either under the influence of a DDoS-attack or because of a power outage in the data center — as was claimed by its owner Roman Shtylman.” “Four days after, the hackers used a backup copy of the key from the hot wallet of the exchange, where the funds of traders were stored, and withdrew 24,000 BTC. Shtilman made an unsuccessful attempt to compensate the victims by selling a stake in BitFloor's property, but could not find an interested party. In 2013, the exchange closed, leaving the affected investors with nothing.”

It’s reported that "the attacker gained accesses to an unencrypted backup of the wallet keys (the actual keys live in an encrypted area)." It’s unclear from the forum discussion if a proper wallet structure was used, however it was definitely not multi-sig, and obviously none of it was insured. None of the customers were able to retrieve any of their funds in the end.

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

Get Social

  • email
  • reddit
  • telegram
  • Twitter

© 2021 Quadriga Initiative. Your use of this site/service accepts the Terms of Use and Privacy Policy. This site is not associated with Ernst & Young, Miller Thompson, or the Official Committee of Affected Users. Hosted in Canada by HosterBox.