Bitcoin hacked – Is there a US cyber war against Bitcoin?

 A number of Bitcoin services, wallets, and exchanges have been destroyed by hacking. Is the US government to blame?

cyberwarOne need not look too carefully to notice that Bitcoin is under attack. In addition to governments warning against using this new form of value, if not banning it outright, we see a slew of  commentators, bankers, and “financial experts” disparaging the innocent cryptocurrency, heaping scorn upon any who might consider using the same. Then there are the cyber attacks themselves.

Consider the fall of once mighty Mt. Gox. According to their own “Crisis Strategy Draft,” Mt Gox was robbed over a period of years. In February it was attacked with the intention of causing meltdown, at which time the theft was discovered and Karpelès has been left holding the bag. A perfect crime.

This is not to absolve Karpelès of blame and possible charges of theft, it simply suggests that the attack was more than just opportunistic. It was well planned and expertly executed. Was it more than mere theft? It should be noted that before Mt. Gox fell to hackers, the US government tried to shut it down by seizing its assets.

November 2013

November 2013 was a very busy month for the “Cyber Team 6.”

The illicit trading platform Silk Road 2 was hacked to death in November. November also saw more than 90,000 Bitcoins disappear from Silk Road clone, Sheep Marketplace. It likewise folded after the cyber attack.

Last November, Australian wallet service inputs.io was drained. BIPS , Danish Bitcoin payment processor lost 1,295 Bitcoins in a cyber-assault the same month.

Also last November, Czech bitcoin exchange Bitcash.cz was hacked. The result: 4,000 user wallets drained.

November saw the hack of Polish Bitcoin Exchange Bidextreme.pl, and the depletion of their client’s Bitcoin and Litecoin wallets.

The GBL exchange claimed to be based in Hong Kong later discovered to have been located in China, vanished in November.  Whether this was the result of an attack or mere theft is not known.

December saw 21 million Dogecoins (another cryptocurrency) disappear from Dogewallet. Total loss placed at less than $13,000.

These hacked Bitcoin sites were for all intents and purposes murdered. One need only view any decent 40s murder mystery and you will discover what a detective needs to make an arrest for murder: means, motive, and opportunity.

Motive

There is no shortage of suspects having motive for the crime. Canada has made little effort to disguise the fact that it is at war with Bitcoin. Norway discourages the use of Bitcoin. Bitcoin has no friend in the Swedish government either. Socially backward Vietnam has banned Bitcoin altogether. Thailand likewise set its face against the cryptocurrency before having a change of heart. In Japan, it has no friend in the government. Russia banned its use although that may be changing.

The media

Hardly a week goes by without the publication of another dozen new articles attacking Bitcoin. None have provided further insight into the risks of trading or keeping Bitcoin than has been stated before.  Will someone please pass a message to the press? The sky is falling. We get it.

Banks

So far, the US government has done everything possible to discourage the use of Bitcoin short of an outright ban.  Individual businesses have been especially targeted for harassment for using it. This is done indirectly using the federally regulated American banking – finance system.

Using the pretext of  protecting the public from “money laundering,” “financial terrorism” and other hollow fear inducing buzzwords, legitimate business are being prevented from doing lawful business by this banking cabal.  The incidents of financial thuggery on the part of the banks are far from isolated.

Official American opposition to Bitcoin is so strong that its effects are being felt beyond our borders.  Toronto-based Bitcoin exchange Vault of Satoshi, has given up entirely on taking dollars in exchange for Bitcoin because of regulatory pressure.

Banks hate competition. Canadian banks hate competition.  Hungarian banks hate competition.  Greek banks hate competition. Israeli banks hate competition. International bankers hate competition.

Of the list of those having motive, none can match the means of the United States. American banks hate competition.

Since last August, Bitcoin has been in the US government’s cross-hairs.  One insipid, intellectually vacuous American politician, Senator Joe Manchin, has not only called for the banning of the cryptocurrency, but has actually demanded it. Colorado Congressman Jared Polis responded to Manchin’s statement facetiously, calling for a ban on the US dollar for reasons similar to Manchin’s. Although Manchin has a better chance of banning Bitcoin than Polis has of banning the dollar, I’m with Polis.

The US government is so protective of the corrupt fractional reserve banking system that one man, Bernard von NotHaus, was arrested and convicted for minting an alternative currency. He was convicted of “counterfeiting,” even though the coins he minted looked nothing like the copper – zinc coins the US government mints.  His coins were made of gold and silver. People liked using them instead of Federal Reserve Notes.

NotHaus was branded a “terrorist” by the US government for promoting the use of an alternative currency.

Not to be left behind in the Bitcoin bashing party are the states of California and Virginia.

One reason for the US government’s hostility toward Bitcoin concerns taxation. The IRS hasn’t got a clue. They haven’t got a plan to even seek a clue.

Given the foregoing, proving motive is a cinch. The United States government hates Bitcoin. Does the US government feel justified in stealing BTC as part of their “war on terror?”

Means and opportunity

Few nations can match the United States for destructive capability.  Whether you want to destroy an entire nation or  simply kill a few people celebrating Holy matrimony or morning their dead, America stands supreme.

It may strike some as unfathomable that the US would carry out cyber attacks, but such unwillingness to consider the possibility is unrealistic. That the US engages in cyber warfare has been established. It’s no secret that the United States attacked computers in Iran and Syria. That the US uses cyber attacks to further its agendas has been confirmed.

Although the US is not alone in its hacking assault programsno nation has the means nor opportunity to hack BTC exchanges that America enjoys.

The United States Cyber Command

From the US Army Cyber Command website:

US CYBERCOM plans, coordinates, integrates, synchronizes, and conducts activities to: direct the operations and defense of specified Department of Defense information networks and; prepare to, and when directed, conduct full-spectrum military cyberspace operations in order to enable actions in all domains, ensure US/Allied freedom of action in cyberspace and deny the same to our adversaries.”

The Army’s cyber-assault program has not been collecting dust. One report suggests that U.S. spy agencies prosecuted more than 200 offensive cyber-operations in 2011.

Conclusion

An examination of the preceding facts do not prove conclusively that the United States intelligence  services are responsible for the most recent spate of attacks upon the Bitcoin network. Those facts can only be tried and proven by a jury. The chances are, no jury will judge this case. The evildoers hold the all the cards in court. This does nothing to change the fact that the US government had not only the motive to murder these Bitcoin businesses, but the means and opportunity which no other suspect can muster.

It may be difficult for some Americans to believe that our government could act so callously as to ruin thousands of innocent people financially, just because they don’t want people to use it. It runs counter to our sense of right and wrong.

We live presently in the year 2014. In the 21st century, the foundation of law under-girding the American way of life has been abandoned. Laws are broken by the American government systematically. There is not much you can do about it except face it.

It cannot be denied that the US government had not only a motive for stealing millions of dollars worth of Bitcoin from the aforementioned victims, but the means and opportunity. This may not secure a conviction in 2014, but in 1944 it most certainly would have supported an indictment.

Book ‘em.

© 2014 ROGUE VALLEY BITCOIN.com

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Reddit account – blog of Mark Karpelès hacked – “database revealed”

hackedHackers wishing to expose Mark Karpelès as a duplicitous scoundrel hacked his blog on Monday, posting accusations of theft in an expletive laced rant.  If the allegations are true, Karpelès may well face criminal charges for withholding assets from a bankruptcy court.

Although the blog returned an error message at 0240 UTC Monday, a view of the Google webcache of the Magical Tux Blog still carried the message. It is presented here in it’s entirety (sans expletives) with links preserved.

MTGOX 2014 HACK, DATABASE REVEALED, LIVE FROM MARK KARPELES’S REDDIT ACCOUNT!!

*** SAVE THIS POST, MIRROR THE FILES, REPOST, SHARE AND KEEP THIS DATA AVAILABLE ***

http://blog.magicaltux.net/wp-content/uploads/2014/03/MtGox2014Leak.zip

http://89.248.171.30/MtGox2014Leak.zip

First and foremost, this is not Mark Karpeles. [Expletive] that [expletive]-[expletive] mother[expletive.]

It’s time that MTGOX got the bitcoin communities wrath instead of Bitcoin Community getting Goxed. This release would have been sooner, but in spirit of responsible disclosure and making sure all of ducks were in a row, it took a few days longer than would have liked to verify the data.

Above you will finding download link and a mirror used without asking from Mark Karpeles very own blog.magicaltux.net.

Included in this download you will find relevant database dumps, csv exports, specialized tools, and some highlighted summaries compiled from data. Keeping in line with [expletive] Gox alone, no user database dumps have been included.

Repost and share this info before it’s gone. Lots of people, including us, lost money and coins. Upvote this post.

We stole no bitcoins. There were none to steal. If you want to donate, you can keep us full of pizzas and beers by sending coins here, 1859rayqN1X7DYjD1BrAHm4vaQxoUhhzsN .

Balance SUM for ALL USERS by currency.
[][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]
Currency: AUD Balance: 924,124.65121
Currency: BTC Balance: 951,116.21905382 <– That fat [expletive] has been lying!!
Currency: CAD Balance: 320,184.36558
Currency: CHF Balance: 99,487.07308
Currency: CNY Balance: 297,775.78994
Currency: DKK Balance: 112,264.56207
Currency: EUR Balance: 5,634,625.59531
Currency: GBP Balance: 921,892.96793
Currency: HKD Balance: 740,519.14894
Currency: JPY Balance: 384,885,150.13700
Currency: NOK Balance: 91,346.00305
Currency: NZD Balance: 58,224.95320
Currency: PLN Balance: 1,645,194.67364
Currency: RUB Balance: 551,162.54477
Currency: SEK Balance: 15,335.84383
Currency: SGD Balance: 43,193.59706
Currency: THB Balance: 666,464.33497
Currency: USD Balance: 30,611,805.67481
[][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]

Total BTC Deposits: 19,065,241.307202
Total BTC Withdrawl: 18,563,466.149383
————————————
BTC Difference: 501,775.157819

[][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]

This entry was posted on 2014/03/09, 19:38 and is filed under Hacking, MTGox, News, Tibanne. You can follow any responses to this entry through RSS 2.0. You can leave a response, or trackback from your own site.”

Forbes is reporting that someone making a post on the BitcoinTalk forum, offered to sell a 20 gigabyte database, supposedly stolen from Mt. Gox., for 100 Bitcoins. These files are said to contain personal information of all Mt. Gox users. Could the individual offering these files to “make up personal loses,” be the same hacker that defaced Karpelès blog and published Mt. Gox’s BTC balances?

Karpelès could not be reached for comment.

© 2014 ROGUE VALLEY BITCOIN.com

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One killed, one wounded in DDoS attack on Bitcoin network

BTC prices dropped about 7% across the board Friday, as the Bitcoin network absorbed a major distributed denial-of-service (DDoS) Wednesday. According to the South China Morning Post, the event which caused a number of exchanges to suspend BTC transfers was a “broad-based attack,” according to Andreas Antonopoulos, chief security officer of digital wallet service Blockchain.
cyberthiefThese most recent cyber-assaults upon the Bitcoin community have added two more victims, one dead, one wounded.  Injured was BTC exchange Poloniex. The attack resulted in the exchange losing more than 12% of the Bitcoins previously in their possession.

Listed as dead is Canadian BTC bank Flexcoin, which was decimated by the assault. The company published this statement on it’s website:

“Having this be the demise of our small company, after the endless hours of work we’ve put in, was never our intent. We’ve failed our customers, our business, and ultimatley (sic) the Bitcoin community.

Please direct any and all questions to admin(at)flexcoin(dot)com and we will reply to you as soon as possible.

There is some fear that US based BTC exchange Kraken might be next as it was announced that the exchange will no longer accept deposits denominated in USD.  The company denies this, blaming pressure from the bank with which they do business. The company is seeking another bank to handle their exchange account.

Two major exchanges – Bitstamp and BTC-e – halted withdrawals during the attack. Coinbase was also said to have suspended BTC withdrawals until the attack had been addressed.

Despite the sophistication of the attack and the amount of “brute force” involved, Bitcoin security experts are confident that the technology and the community itself are able to withstand such assaults.

© 2014 ROGUE VALLEY BITCOIN.com

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Mt. Gox announcement promises criminal complaint

Karpelès

[Translation from the Japanese]

February 28, 2014

To anyone concerned

Mark Karpeles
Representative Director
MtGox Co., Ltd.
Shibuya 2-11-5
Shibuya-ku, Tokyo

ANNOUNCEMENT REGARDING AN APPLICATION FOR COMMENCEMENT OF A PROCEDURE OF CIVIL REHABILITATION

MtGox Co., Ltd. made today an application for commencement of a procedure of civil rehabilitation (minji saisei) at the Tokyo District Court. This application was accepted on the same day. Further, MtGox Co., Ltd is under several orders issued by the Court : a preservative order prohibiting it from paying its debts, transferring its assets or establishing security over its assets, an order establishing a comprehensive prohibition of forced attachment of its assets by its creditors and a supervisory order ordering supervision by a supervisory committee. In consequence, MtGox hereby informs you as follows.
We first express our most sincere regrets and apologies for this situation and for causing so much inconvenience to all our users and other interested parties. We will fully respect the above orders and maintain our assets with all the necessary care.

  1. Financial situation, reasons and timeline leading to this application
    1. (1) As of now, the liabilities of MtGox Co., Ltd exceed its assets and its financial situation is as follows:
      Total amount of assets 3,841,866,163
      Total amount of current liabilities 6,501,119,371
    2. (2) The increase of current liabilities may be linked to a loss of bitcoins and customer funds. These are now investigated by an expert and all efforts are made to discover the truth. This application was prompted by the following troubles:
    3. At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.

    4. As a result of our internal investigation, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.

    5. We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.

    6. On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary but they approximate JPY 2.8 billion.

    7. We are investigating the causes of these problems. Since there are probably a variety of causes including hacking by third parties, we need to investigate a huge amount of transaction reports in order to establish the truth. As of this date, we cannot confirm the exact amount of missing deposit funds and the total amount of bitcoins which disappeared.

    8. Once we discovered that bitcoins had disappeared and the discrepancies between cash funds and deposit balances, we judged that it would be difficult to continue our activities normally and we therefore closed our site at noon on the 25th (Japan time).

    9. (3) Regarding the filing of a complaint or damages report, an expert has been mandated and investigations have started. We will make all efforts to ensure that crimes are punished and damages recovered.
    10. Further we will fully cooperate with inquiries from authorities and investigations related to this matter, in Japan or overseas.In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community.
    11. All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all.
  2. Outline of the application
    1. (1) Application date February 28, 2014
    2. (2) Jurisdiction Tokyo District Court
    3. (3) Counsel of applicant

      Baker & McKenzie (Gaikokuho Joint Enterprise)
      Attorney-at-law Junko Suetomi
      Attorney-at-law Yamamoto Hideyuki
      Yodoyabashi & Yamagami Legal Professional Corporation
      Attorney-at-law Akio Shinomiya
      Attorney-at-law Kazumasa Kawai

    4. (4) Supervisor Nagashima Ohno & Tsunematsu
      Attorney-at-law Nobuaki Kobayashi
    5. (5) Investigator idem
    6. (6) Case no. 2014 (sai) 12Civil rehabilitation commencement application
  1. Contact information
    A call center has been established to respond to all inquiries. The call center is planned to start on March 3, 2014. All inquiries to MtGox Co., Ltd. should be made to the following telephone number:
  2. Telephone number   +81 3-4588-3921
    Working hours   Monday to Friday 10am to 5pm (Japan time)Please refrain from contacting the office of the supervisor/investigator.

© 2014 ROGUE VALLEY BITCOIN.com

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Bitcoin lives.

You wouldn’t know it if you read the newspaper.  The television avoids the subject. You would have to work to find it in any “news” items on the internet. Still it’s true.

Bitcoin lives.

rosiecoin2

It’s clear many people trust Bitcoin over the skeptics, as it continues to hold it’s own. Nowhere is this more true than among the Chinese people, who are buying Bitcoin at a furious rate.  This runs counter to Chinese state propaganda, which suggests that the Chinese people have lost confidence in Bitcoin.

According to the Chinese state owned Xinhua News Agency:

The failure of Mt. Gox, once the world’s largest bitcoin exchanges, has hurt market confidence in the virtual currency in China and prompted many Chinese investors to question its viability.

China has been as hostile to Bitcoin as a government can be without banning it outright.

Two months ago, the Chinese government forbade Alibaba’s Taobao website, an eBay type platform, to allow merchants to accept payment in Bitcoin. This includes a ban on all virtual currencies on the website.

This coincided with an announcement by the Chinese central bank, that no Chinese financial institution is permitted to trade in cryprocurrencies. These announcements precipitated a  20% fall in Bitcoin values as some Chinese investors panicked.

BTC China halted trading for a time, when it was announced that it was unable to accept Chinese currency. BTC China is again doing a robust business. The prohibition didn’t seem to affect Hong Kong. In that city, investors can buy Bitcoins over the counter at the new ANXBTC Exchange.

The Chinese government is none too happy about the people’s refusal to be dissuaded from buying bitcoin, and it may have become personal. There is reason to suspect that Chinese hackers retaliated against the central bank.  The website for the People’s Bank of China went down after a prolonged denial of service attack.

With all the condemnation Bitcoin has received from professional “financial analysts,” most of whom have a personal and financial stake in its demise, the people are embracing it.  These same financial “experts” show by their statements that they don’t really understand what Bitcoin is about – not exactly the kind of people I want advising me.

Regardless of the pronouncements of the naysaying experts, there are still many people who believe that Bitcoin is undervalued. They have money and they are willing to gamble that Bitcoin will grow in value.  In China, that enthusiasm is greater than the strong words and fierce countenance of the People’s Republic of China.

Prices on the BTC China exchange are at present trading at about 1.5 – 2% lower than on Bitstamp and Coinbase.

There’s still room on the Bitcoin elevator for the courageous. Going up?

© 2014 ROGUE VALLEY BITCOIN.com

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Complete Blockchain Analysis of Suspicious Transfers on Feb. 6th Related to Mt. Gox Stolen/Siezed Coins via /r/Bitcoin

RVBTC:

This indeed “needed to be said.”

Originally posted on Cryptocoins Today:


Complete Blockchain Analysis of Suspicious Transfers on Feb. 6th Related to Mt. Gox Stolen/Siezed Coins

I was surprised no one else has analyzed the transfers that caused the huge spike in days destroyed on Feb. 6th.

http://ift.tt/1dtmOiX

Days destroyed is a good indication of dormant coins that have not been spent for a long time being transferred again. This would indicate one of the following scenarios:

1) Mt. Gox coins being moved from cold storage

2) Long time holders moving coins possibly to sell in anticipation of bad news based on public or inside information (that the moved coins have not been spent indicates this is not true)

The story starts on Feb. 4th when Mt. Gox first began blocking accounts that were funded by BitInstant:

http://ift.tt/1cPyflu

It culminated on Feb, 7th when Mt. Gox completely halted BTC withdrawals:

http://ift.tt/1pKJ7WU

The sudden spike in days destroyed on Feb. 6th is…

View original 233 more words

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Mt. Gox makes an announcement – saying very little

Less than week after the website of Tokyo based Bitcoin trading exchange Mt. Gox went dark, the company has posted an announcement in Japanese and English.  MT-GOX-tombstone

The announcement which contained little new information and which may have been mandated by Japanese Bankruptcy Court rules, was published yesterday.

The full English text reads as follows:

[Translation from the Japanese]

March 2, 2014

To anyone concerned

Mark Karpeles
Representative Director
MtGox Co., Ltd.
Shibuya 2-11-5

Shibuya-ku, Tokyo

ANNOUNCEMENT REGARDING AN APPLICATION FOR COMMENCEMENT OF A PROCEDURE OF CIVIL REHABILITATION

An overview of the situation should be published here shortly (probably on March 3, 2014 (Japan time)).

Contact information

A call center has been established to respond to all inquiries. The call center is planned to start on March 3, 2014. All inquiries to MtGox Co., Ltd. should be made to the following telephone number:

Telephone number +81 3-4588-3921
Working hours Monday to Friday 10am to 5pm (Japan time)

Please refrain from contacting the office of the supervisor/investigator.

There has also been some discussion among Mt. Gox BTC victims as the whether they might be able to simply assume control of the company as a means to recover all or part of their investment. Given the fact that Mt. Gox has already filed for bankruptcy, such a plan has little chance of succeeding.

As the “mainstream media” continues to celebrate the death of Bitcoin, the cryptocurrency stubbornly continues to trade in the $550 – $600 range.

Such impudence!

© 2014 ROGUE VALLEY BITCOIN.com

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