Cryptsy Hacked: Bitcoin Worth $USD 6 Million Stolen

The hacker inserted a Trojan malware into Cryptsy’s code so that he could access precious information and transfer cyber currencies.

Paul Vernon, also known as Big Vern, founder of Cryptsy announced that the cryptocurrencies exchange had been hacked. The announcement was made more than a year after the discovery of the hack because Cryptsy, in the meantime, was trying to cover everything up by channelling the money it was earning back into its clients’ wallets.

The attacker – famous for developing Lucky7Coin – inserted a Trojan malware into Cryptsy’s code so that he could access precious information and transfer cyber currencies – mainly bitcoin and litecoin – out of Cryptsy’s safe. Overall the losses amount to $6 million, equal to 13,00 BTC and 300,000 LTC if translated into cryptocurrencies.

GIF Source: Imagur
GIF Source: Imgur

Cryptsy is under investigation by a US federal court as it held “hostage” money belonging to its clients. The account holders were in fact denied access or unable to withdraw funds. Clients were not warned of the hack and many of them continued depositing funds into the exchange. The money was probably used to refill those wallets who resulted empty after the attack. Cryptsy still owes 10,000 BTC (3830900.00 US Dollar) to its clients. Big Vern declared that he even try to involve the FBI in the matter, but did not succeed to do so.

Now, there is a bounty over Lucky7Coin’s developer’s head: 1000BTC promised to anyone who can trace the stolen money. Big Vern, on the other hand, promises “mercy” in the case of the hacker spontaneously returning the money or “war” if the hacker doesn’t.

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Vernon lists three possible scenarios: Cryptsy is acquired and the buyer can pay the withdrawals with his funds; Crytspy should be shut down and a bankruptcy file should be opened – leaving the debtors in the hands of a court that is then appointed to distribute the disbursements; the third option is hoping in the recovery of the stolen money – hence the aforementioned bounty.

Help in the search and suggestions towards the solving of the issue were offered to the American-based exchange: some, in fact, suggested to spread the entire loss to all users, others believe withdrawals should only be disabled on short balanced coins, existing balances should be “frozen” and funds released once fees are collected.

The case is far from being closed and Cryptsy is currently on the lookout for community leaders to keep the “platform” functioning.

Top, Featured Image ViaZach Copley/Flickr
 

Written by Ali Raza

Ali is a freelance journalist, having 5 years of experience in web journalism and marketing. He contributes to various online publications. With a master degree, now he combines his passions for writing about internet security and technology. When he is not working, he loves traveling and playing games.