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Bitcoin site is hacked, with $1million of the virtual currency stolen… and young entrepreneur is forced to deny it was an ‘inside job’
- Bitcoin is a digital-only currency traded from computer to computer
- Alleged theft is one of the largest since bitcoin was created four years ago
- Experts say as popularity increases more thieves will look to steal them
Published: 14:12 BST, 8 November 2013 | Updated: 14:39 BST, 8 November 2013
An entrepreneur says hackers stole $1million of the virtual currency bitcoin from his website.
The Australian man, who refused to be identified citing fears for his safety, said thieves compromised his site and took a haul of virtual currency.
Bitcoin is a digital-only currency traded from computer to computer and is usually used to pay for goods online.
Theft: $1million bitcoins were stolen from an Australian man's website
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The alleged theft is one of the largest since bitcoin was created four years ago.
Bitcoin has no central authority and is not backed by governments or banks.
A bitcoin user who calls himself TradeFortress told ABC more than 4,100 bitcoins worth about $1.1million (£585,000) were stolen from him.
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Solidworks models of fanuc robots. He says he is not much older than 18 and he knows the chances of getting any of the digital currency back is unlikely because all bitcoin transactions cannot be reversed.
As the transactions are all anonymous, speculation has arisen that this was an inside job and TradeFortress took the coins for himself.
However, the young man strenously denied the allegations - but admitted he was unlikely to report the theft to police.
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'The police don't have access to any more information than any user does when it comes to bitcoin. Some say it gives them control of their money,' he explained.
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The $1.1million bitcoins were owned by users of his website who had trusted him to look after their digital currency.
A spokesman for the Australian Federal Police says to his knowledge, a theft of bitcoins has never been investigated but if it was reported to officers then police would investigate it like any other theft.
Experts say as the popularity of bitcoins increases, thieves will look to hack into the system and exploit the currency's anonymous nature.
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Stilgherrian, a technology commentator, said unlike stocks or bonds, bitcoins are very hard to trace.
'Once you've got the bitcoin there's no way, well no easy way, of telling where you got that from,' he said.
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'So from a money laundering point of view, it's very attractive.
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'We're talking about roughly a million dollars worth of bitcoin gone. That puts it up there with some of the biggest bank robberies in history.'
A bitcoin is worth about $275 (£161). At the beginning of the year, they were worth about $30 (£17) each.
Sthilgarian says the popularity of the digital currency is making stealing it more attractive to crooks.
'People rob banks because that's where the money is, your bitcoin wallet which is really just a digital file sitting on your computer, can be just as vulnerable and just as attractive,' he said.
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'And the more of it that is out there, the more thieves will be drawn to it.'