Jul 2013 - Bitfunder and WeExchange Hack - $788k (United States)
“In July 2013, BitFunder’s software was said to be hacked, enabling the theft of 6,000 bitcoin from Montrol’s companion fiat-to-crypto platform, WeExchange. Montrol allegedly failed to communicate the lost monies with investors or regulatory authorities. On one occasion, he promoted the operation as “commercially successful” instead of insolvent.”
Further Analysis
Improper storage combined with a lack of transparency enabled this operation to continue for many years as an insolvent firm. This also shows the very real tendency of some exchange operators to hide key details of hacks that occur, which is why a mandated level of transparency is so critical. Regular audits alone are only effective if the results are communicated and verifiable by the general public.
More Cryptocurrency Exchange Hacks/Scams/Frauds
Mt. Gox User champbronc2 Hacked > > < < Feathercoin 51% Attack
Sources/Further Reading
100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25)
https://www.justice.gov/usao-sdny/pr/former-operator-bitcoin-investment-platform-sentenced-securities-fraud-and-obstruction (Feb 10)
https://www.justice.gov/usao-sdny/pr/operator-bitcoin-investment-platform-pleads-guilty-securities-fraud-and-obstruction (Feb 11)
https://financefeeds.com/sec-finalize-recommendation-case-bitfunder-operator-following-restitution-determination/ (Feb 11)
U.S. arrests operator of shuttered bitcoin investment platform | Reuters (Feb 11)
Bitcoin Stock Exchange Operator Pleads Guilty to Securities Fraud (Feb 11)
Founder of Two Closed Cryptocurrency Services Pleads Guilty to Federal Charges | Bitcoinist.com (Feb 11)
Bitcoin Exchange Admin Charged for Lying About Hack (Mar 7)
FBI Arrests Exchange Operator for Lying About 6000 Bitcoin Hack – Share Talk (Mar 7)
6000 BITCOIN HACK - V-Coins (Mar 7)
WeExchange - Bitcoin Wiki (Feb 3)
WeExchange (Mar 7)
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