$6 000 000 USD

NOVEMBER 2013

MARSHALL ISLANDS

PICOSTOCKS

DESCRIPTION OF EVENTS

"There is no sign of an intrusion into the systems. Both wallets were located on different computers. We suspect that these have been copied by people who had access to the system in the past and decrypted."

PicoStocks was a centralized exchange based in Marshall Islands, which operated one of the earliest forms of offshore fundraising, where entrepreneurs could launch offerings for investors. On November 29th, 2013, the service suffered a breach of 5,896.23098163 bitcoin which were taken from two separate wallets. Ultimately, the exchange covered all affected user losses and was able to relaunch successfully.

HOW COULD THIS HAVE BEEN PREVENTED?

This situation could have been most effectively prevented by the use of a multi-signature wallet, rather than a single private key. In such a setup, the cold storage wallet would have required approvals from multiple team members to initiate a withdrawal. This, combined with a reasonable level of training for key holders, would have effectively prevented an attacker from obtaining enough private keys to perform a transfer.

 

Check Our Framework For Safe Secure Exchange Platforms

100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25)
List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses (Feb 15)
Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5)
PicoStocks Website On December 28th, 2012 - Internet Archive (Feb 8)
PicoStocks - Bitcoin Wiki (Feb 8)
Quote of Original Announcement on BitcoinTalk (Feb 8)
Picostocks hacked, even cold wallet emptied - Reddit (Feb 8)
tytus User Registration - BitcoinTalk (Feb 8)
Cold Wallet Breach Transaction - Blockchain.info (Feb 8)
Hot Wallet Breach Transaction - Blockchain.info (Feb 8)
tytus Theft Announcement on BitcoinTalk - Internet Archive (Feb 8)
Hot Wallet Funds Start To Move - Blockchain.info (Feb 8)
Subsequent Movement of Cold Wallet Funds - Blockchain.info (Feb 8)
How Publishing User IDs with Trades Makes a Crypto Exchange Better for Everyone - Medium (Feb 8)
PicoStocks Final Tweet - Twitter (Feb 8)
Reddit User Godfreee's estimate - Reddit (Feb 8)
Picostocks Hot Wallet - Blockchain.info (Feb 8)
Picostocks Cold Wallet - Blockchain.info (Feb 8)
BuyBitcoinsWorldwide Historic Bitcoin Price Chart (Jan 30)
PicoStocks Homepage On October 28th, 2013 - Internet Archive (Feb 8)
PicoStocks Website On February 9th, 2014 - Internet Archive (Feb 8)
servowire Comment - Reddit (Feb 8)
thekiwi99 Comment - Reddit (Feb 8)
riplin Comment - Reddit (Feb 8)
Users Reporting Withdrawal Problems In 2019 - BitcoinTalk (Feb 8)
tytus Post Count 275 Prior To Delete - BitcoinTalk (Feb 8)
PicoStocks Website On September 28th, 2021 - Internet Archive (Feb 8)
PicoStocks Website On January 3rd, 2022 - Internet Archive (Feb 8)
Picostocks Trading Volume - CoinMarketCap (Feb 8)
PicoStocks Withdrawals Failing in May 2019 (Feb 14)

Sources And Further Reading

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

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