According to Bitcoin lore, the cryptocurrency got its humble beginnings in a white paper called “Bitcoin: A Peer-to-Peer Electronic Cash System” written by a man calling himself Satoshi Nakamoto. For years, though, no one knew Nakamoto’s actual whereabouts or even if he really existed at all… until now. Newsweek has done some impressive detective work and has tracked down whom it claims to be the real Nakamoto at his home in Temple City, California. More →
The next time the deposed prince of Nigeria has a massive inheritance to send you, will he offer to give it to you in Bitcoins? Cornell associate computer science professor Emin Gün Sirer has written a lengthy post that details why we shouldn’t believe bankrupt Bitcoin exchange Mt. Gox’s official explanations for how it lost nearly $500 million worth of Bitcoins. Essentially, Sirer just doesn’t think incompetence alone can’t explain such a stunning loss and alleges that there had to have been at least one person working within Mt. Gox who was either masterminding or aiding and abetting the theft. More →
Those who follow virtual currency Bitcoin with even the slightest interest have no doubt read of the major breach and subsequent bankruptcy filing of Mt. Gox, formerly the world’s largest Bitcoin exchange. The Tokyo-based company had been eerily silent over the past few weeks as customers continued to panic as their investments in Bitcoin, some worth millions, had vanished; Mt. Gox went offline some time ago, and rumors of a breach began to swirl immediately. Now, the company has confirmed that more than $500 million worth of Bitcoins were lost in a major heist that completely wiped out the exchange, and it gave a loose explanation of how it thinks the monumental robbery occurred. More →
Who would thought that a former online Magic Card market wouldn’t be a safe place to invest your money? The Wall Street Journal reports that Mt. Gox, which until last week had been the world’s largest Bitcoin exchange, has filed for bankruptcy. Mt. Gox admitted on Friday that it had lost around 750,000 of its customers’ Bitcoins along with 100,000 of its own Bitcoins, which the Journal estimates all have a combined worth of $473 million. More →
This has been a rough week for many Bitcoin owners who have lost substantial amounts of money due to the collapse of Mt. Gox, which had been the world’s largest Bitcoin exchange. However, Bitcoin owners who escaped the fraud that took down Mt. Gox shouldn’t rest too easy: This is likely just the end of the beginning of a burgeoning Bitcoin fraud wave. In fact, American Banker has taken a look at the early history of online payment platform PayPal and has concluded that Bitcoin’s immediate future can be boiled down to just two words: “More fraud.” More →
A few days before CES 2014, security researchers discovered that Yahoo was unknowingly distributing malware via the ads displayed on its home page, with as many as 2 million European users at risk of having been infected in the four days hackers exploited holes in the company’s Java-based ad network. Some of the affected computers were transformed into improvised Bitcoin miners to gather the cryptocurrency for the hackers responsible. Yahoo was not very forthcoming about the issue, and it only offered limited details about the attack, without specifying how many users were infected or helping any of them deal with the matter, The Guardian reports. More →
If you’ve never encountered ransomware, consider yourself lucky. Ransomware is malware that completely locks down your computer and threatens to corrupt or destroy your files unless you pay a fine. In the past, there have been relatively simple workarounds to remove ransomware from your computer, but Ars Technica shares the stories of those who came face to face with CryptoLocker, an especially persistent piece of ransomware that demands affected users pay a $300 fee if they ever want to see their files again. More →
Buying and selling illegal drugs on the Internet using a virtual currency isn’t as fun as it used to be. The Associated Press, via NPR, reports that law enforcement officials in the United Kingdom, Sweden and the United States have arrested eight more individuals who have connections to Silk Road, the now-shuttered online drug den that accepted digital currency Bitcoin as a form of payment. The AP says that “most if not all the arrests took place within a couple of days of last week’s capture of Silk Road’s alleged mastermind, Ross Ulbricht, in San Francisco,” which likely means that they have enough evidence to unravel the entire drug ring just from data they seized during the initial raid.
It’s a shame that Breaking Bad had to end before we could see what would have happened if a distributor had tried to pay Walt and Jesse using Bitcoins. CNN reports that federal officials have arrested Ross William Ulbricht, the alleged mastermind behind Silk Road, the notorious Bitcoin-accepting Internet drug den. CNN says that Ulbricht has been indicted by federal prosecutors for narcotics trafficking, computer hacking and money laundering and that the Federal Bureau of Investigation has seized and shut down Silk Road completely. The FBI says that the website, which let users buy drugs, hire assassins and deal illegal firearms, generated annual revenue of around $1.3 billion.
Things have been very up-and-down for Bitcoin lately and the virtual currency’s road coud be getting even rockier now that the United States federal government is getting involved. IDG News reports that the U.S. District Court in Maryland this week order the seizure of Bitcoin exchange Mt. Gox’s funds because it allegedly “failed to register as a ‘money transmitting business’ in accordance with 18 U.S. Code 1960.” The court-issued warrant alleges that Mt. Gox owner Mark Karpeles denied that his firm exchanged currency or “transmitted funds based on instructions to customers” in a questionnaire supplied by Wells Fargo back in 2011. Wells Fargo issues such questionnaires to determine whether clients it works with need to register as currency traders with the U.S. Treasury Department.
Bitcoin is a good way for people to conduct business off the grid, but the free ride may soon come to an end. Everyone’s favorite virtual currency has been on quite a wild ride over the past few weeks. The mainstream media finally caught wind of Bitcoin and curious parties sent it skyrocketing to $220 before watching it plummet below $70 a few short days later. It has been quite a roller coaster, but all this attention may have caught the IRS’s eye, too — Forbes contributor Robert Wood noted in a recent column that the Treasury’s FinCEN already has rules pertaining to Bitcoin, and soon the IRS might as well. More →
For reasons that are likely attributable to excessive use of illicit substances, online Bitcoin-accepting drug den Silk Road thinks that police will jump at the chance to help it track down an alleged blackmailer who is threatening to shut the site down unless he gets paid a certain amount of money. The Telegraph reports that Silk Road has been under constant DDoS attacks from a person who calls himself “Lance G” and who has been “threatening to crash the site unless it fronted the surprisingly small amount of $5,000.” As a result, Silk Road is offering a $5,000 reward for any “information that leads to the arrest and conviction of whoever is behind this extortion attempt.” As The Telegraph points out, however, most law enforcement officials are unlikely to devote significant resources toward making sure that a hub for online drug dealing stays online.
Imagine a world where the Nasdaq, the Nikkei and the FTSE all failed within the span of a week and you have an idea how crazy the world of virtual currency trading has become. Wired reports that a new study from computer scientists Tyler Moore of the Southern Methodist University in Dallas and Nicolas Christin of Carnegie Mellon University has found that 45% of Bitcoin exchanges end up shutting their virtual doors while leaving their users’ money in limbo. However, this doesn’t mean that the Bitcoin exchanges that have survived so far are safe havens, since the study also shows that they’re under constant assault from cybercriminals who are working around the clock to hack users’ transactions. More →