Over the past month and a half, several notorious Bitcoin exchanges have been either breached or suffering from DDoS attacks. Things took a turn for the worse when Chinese exchange Bter admitted they lost over 7,000 Bitcoin a few days ago. And it looks like another exchange has been breached, as KipCoin posted a message on their website saying over 3,000 Bitcoin have been stolen from their platform as well.
KipCoin – A Rather Unknown Chinese Exchange Platform
Unlike its name suggests, KipCoin is not an alternate digital currency but an actual digital currency trading platform. Not too many people have heard from KipCoin outside of China by the looks of it, but the platform has seen its fair share of success in the world of Bitcoin and cryptocurrency. So much success even that it became a target for hackers who tried to empty the platform’s wallets.
Unfortunately for Bitcoin enthusiasts around the world, attempts made by these hackers have proven to be successful. KipCoin’s server provider is called Linode, and the KipCoin Linode account had already been breached on June 30th of 2014. Once the account was breached, the hacker(s) changed the Linode account’s password, locking out the original owners for the time being.
Once that was achieved, things got even worse as the KipCoin Linode root password had been changed during this attack, as the hacker(s) gained control and management of the entire KipCoin server. needless to say, this is a worst case scenario for any platform’s security, and it looks like KipCoin was the unfortunate victim of a successful breach.
On July 2nd, the Linode account was still in the hands of the hacker(s), as he/she/they proceeded with downloading the Bitcoin wallet files on the KipCoin Linode server. However, things seemed to calm down after that, as nothing malicious seemed to happen. In fact, the Linode account access was successfully restored and the KipCoin team regained control shortly after.
But that didn’t mean the hacker(s) was/were done by any stretch of the imagination, as he/she/they kept lurking and successfully obtained funds in October of 2014. Because the hackers had access to the Bitcoin wallet file before – and KipCoin apparently never changed Bitcoin addresses or wallets – they could successfully claim any incoming transactions being sent to the KipCoin address.
To this date; the KipCoin platform lost over 3,000 Bitcoin, which can be traced to these addresses :
News Only Revealed Now in Light of Bitstamp & Bter Issues
The obvious question is why the KipCoin team is only admitting to these hacks right now, when the events themselves transpired in 2014. KipCoin decided to not disclose this information immediately in light of BitStamp losing a lot of coins, and even more recently, Chinese exchange Bter losing another 7,170 Bitcoin. During the “waiting period”, KipCoin has taken all the necessary steps to file a formal complaint with the police.
As most of you are aware, China is not too keen on Bitcoin and other digital currencies, so it’s rather difficult to file a report on Bitcoins being stolen and have the police cooperate in order to solve the crime. It took KiPCoin several months to collect all the evidence in order to build a strong case, and after hiring an attorney to represent their case, the police finally agreed to opening an investigation. The case will be filed once the Chinese Spring Festival has come to an end.
The KipCoin team feels confident about the “long arm of Justice”, and they even managed to collect some evidence to point the police in the right direction of the hacker(s). Furthermore, KipCoin is still open to the hacker(s) simply returning the stolen money , and they will even go as far as dropping the case once all the money has been returned to them.
Account Funds Verification Begins Soon
For the time being, the Kipcoin platform will close its door, and an internal audit will begin to verify Bitcoin funds belonging to each and every account. Balances in Litecoin, Yuan and DogeCoin are most likely not affected by this breach, but the internal audit will reveal all of the details. Liquidity for Litecoin and Dogecoin is expect to return after the Spring Festival.
According to preliminary results, no Chinese Yuan have been stolen from user accounts, but the funds will remain in custody of KipCoin during the police investigation. In regards to Bitcoin funds gone missing, the Kipcoin team will work up a solution during the Spring Festival period and actively cooperate with the police investigation in order to hopefully recover the stolen funds.
Website : https://www.kipcoin.com/