Computer compromise leads to theft of bitcoins valued at $500,000 USD

Re:Computer compromise leads to theft of bitcoins valued at ... by mootothemax on Tuesday June 14, 2011 @10:32AM (#2653087)

With a bank you might be able to get it back

I'm not sure that's true. As I mentioned in another comment, the CHAPS payment system doesn't allow transactions to be reversed, and the other major system in the UK, Faster Payments, I believe has a 24 window for banks to request a reversal, usually in case they transmit something by mistake.

Honestly, I think we place too much faith in banks sometimes.

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Re:Computer compromise leads to theft of bitcoins valued at ... by nokcha on Tuesday June 14, 2011 @01:28PM (#2653886)

In the US, consumer liability for fraudulent withdrawals from bank accounts is generally limited to $500 by federal law, provided that the consumer detects the fraud and notifies the bank within 60 days. The bank is responsible for the amount in excess of $500. Many banks even have a policy to refund the entire amount fraudulently deducted.

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Re:Computer compromise leads to theft of bitcoins valued at ... by StavrosK on Tuesday June 14, 2011 @10:48AM (#2653176)

Probably... At least it would be more traceable, though...

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Re:Computer compromise leads to theft of bitcoins valued at ... by imjustatechguy on Tuesday June 14, 2011 @10:23AM (#2653040)

Traceability in the real world banking institutions has its advantages. As a business owner I've once had a mistaken transactions that resulted in erroneous withdrawal of +10,000 from business bank account. A phone call to the bank and a bit of investigation fixed things and I don't think the bank was out any money either, it was just a wrong account number issue.

With bitcoin, things are not at all reversible.

Also I expect bitcoin to be shutdown because it could be a great way to fund terrorist activities. (There are major federal investments in anti-money laundering systems that monitor bank transactions, bitcoin transactions operate outside of this system and thus will be suspect.)

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Re:Computer compromise leads to theft of bitcoins valued at ... by mootothemax on Tuesday June 14, 2011 @10:29AM (#2653069)

With bitcoin, things are not at all reversible.

True of plenty of payment methods, e.g. CHAPS in the UK:

Unlike other forms of payment such as cheques, CHAPS payments are irrevocable

http://www.ukpayments.org.uk/payment_options/chaps/

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Re:Computer compromise leads to theft of bitcoins valued at ... by ubernostrum on Tuesday June 14, 2011 @10:48AM (#2653177)

I think a better word is "traceable". Presumably with CHAPS one can find out who the money went to, and other mechanisms can come into play to get it back.

Bitcoin, though, is supposed to herald the awesome future of totally anonymous, totally untraceable transactions in which once your money's gone, you're fucked.

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Re:Computer compromise leads to theft of bitcoins valued at ... by chopsueyar on Tuesday June 14, 2011 @10:49AM (#2653190)

There are major federal investments in anti-money laundering systems that monitor bank transactions

That worked really well for Wachovia...

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-d...

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Re:Computer compromise leads to theft of bitcoins valued at ... by jasongullickson on Tuesday June 14, 2011 @11:20AM (#2653352)

Also I expect bitcoin to be shutdown because it could be a great way to fund terrorist activities.

So is cash :)

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Re:Computer compromise leads to theft of bitcoins valued at ... by mbreese on Tuesday June 14, 2011 @02:34PM (#2654139)

It's pretty hard to move large quantities of cash around... it's pretty easy to move a flash drive with a bitcoin wallet around.

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Re:Computer compromise leads to theft of bitcoins valued at ... by imjustatechguy on Tuesday June 14, 2011 @02:52PM (#2654222)

That is why people who try to bring into the US large amounts of cash through border control have it confiscated if they don't declare it.

http://www.ehow.com/about_5445167_laws-bringing-cash-america...

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Re:Computer compromise leads to theft of bitcoins valued at ... by drivingmenuts on Tuesday June 14, 2011 @10:29AM (#2653068)

Even if it's not, that's the easy claim to make these days that will get them shut down.

Kind of like "it's for the children". That phrase alone can be used to justify so many actions.

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Re:Computer compromise leads to theft of bitcoins valued at ... by gwern on Tuesday June 14, 2011 @10:24AM (#2653046)

> With a bank you might be able to get it back

Only if it hasn't been transferred elsewhere and laundered and whatnot. Then all the bank is doing is penalizing its other customers to make you whole.

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Re:Computer compromise leads to theft of bitcoins valued at ... by amalcon on Tuesday June 14, 2011 @10:41AM (#2653148)

There's some capacity for error or crime built into the numbers as they stand. This means that the bank is more-or-less insuring against those things. All customers reap the benefits of insurance, because the benefit is the security, not the restitution.

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Re:Computer compromise leads to theft of bitcoins valued at ... by BigZaphod on Tuesday June 14, 2011 @10:31AM (#2653076)

Nobody would keep $500,000 in cash sitting around their house, but that's essentially what this guy did.

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Re:Computer compromise leads to theft of bitcoins valued at ... by brk on Tuesday June 14, 2011 @10:45AM (#2653169)

Completely untrue.

I've witnessed stacks of cash far in excess of that.

However, when it is done, there is usually a fair bit of armament around the cash, and the kinds of people that keep that sort of cash on hand are also not the sort you want to commit an amateur robbery against.

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Re:Computer compromise leads to theft of bitcoins valued at ... by stef25 on Tuesday June 14, 2011 @11:25AM (#2653377)

We're not all criminals. Civilians keeping 500K in their house is plain stupid.

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Re:Computer compromise leads to theft of bitcoins valued at ... by jlangenauer on Tuesday June 14, 2011 @12:01PM (#2653548)

Doubly so in the UK. Here, the police can presume without proof (and have done so) that any cash in excess of GBP1000 is the "proceeds of crime", and the onus is then upon the owner of the cash to prove that it isn't.

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Re:Computer compromise leads to theft of bitcoins valued at ... by gyom on Tuesday June 14, 2011 @12:35PM (#2653673)

Sounds like a convenient rule for law enforcement to incriminate people when they have a "hunch" about their illegal actions.

When I was 12 y.o. I had that sort of money in my bedroom (years of saving money from my paper route job, and factoring inflation). Of course, I could prove that it was mine, but it seems like the bar is somewhat low if it's set at GBP1000. It's the kind of money that you use to pay to rent a cottage for your vacations, not ludicrous drug-traffic amounts ...

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Re:Computer compromise leads to theft of bitcoins valued at ... by amalcon on Tuesday June 14, 2011 @11:03AM (#2653278)

But what would be the other options for a normal user? You could completely hand over your wallet to someone else, but that sort of defies the point of Bitcoin: they could log transactions, be raided by authorities, etc. You could store your wallet in a way that's physically secure (say, on a flash drive), but this just requires the hacker to insert software that waits until you try to spend some of that bitcoin. You could maintain many separate wallets on separate flash drives, so you would only lose part of your savings to this sort of attack, but that is inconvenient.

The only solution I'm coming up with would be to hand over control of your wallet to an anonymous-yet-trusted third party who's hidden behind Tor or such. The difficulty is in finding (or creating) an anonymous-yet-trusted party in the first place.

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Re:Computer compromise leads to theft of bitcoins valued at ... by cakeface on Tuesday June 14, 2011 @10:53AM (#2653217)

It seems like secure servers where you can store / access your bitcoins could be a good product.

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Re:Computer compromise leads to theft of bitcoins valued at ... by chopsueyar on Tuesday June 14, 2011 @10:53AM (#2653222)

Nope.

http://www.wired.com/threatlevel/2011/06/bank-ach-theft/

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