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A leading bitcoin processing company, BitPay lost more than $1.8 million in 2014 because of hacking attacks. Atlanta Business Chronicle reporter found this information in a BitPay lawsuit.

Atlanta Business Chronicle reports that back in 2014 Bitpay’s Chief Financial Officer Bryan Krohn received an email from somebody pretending to be a journalist writing about bitcoin. The message contained a hidden link to a site controlled by the hacker. 

Using this link, the hacker accessed Krohn’s corporate email address and sent a message to the company’s CEO Stephen Pair asking to transfer 1,000 bitcoins to a certain BitPay account, which supposedly belonged to a customer. Pair sent the money to the account mentioned in the email.

According to Atlanta Business Chronicle, the hacker sent several messages and (as a result) acquired about 5,000 bitcoins. Back in 2014 this sum was equal to $1.8 million.

The company discovered the problem only when they contacted the customer in question and found out that they did not receive or requested those thousands of bitcoins. 

“Bitpay tried to get its insurer to cover $950,000 of the loss, but in June the insurer declined to pay. Bitpay is now suing the insurer,” says the Atlanta’s newspaper.

The company confirmed that the incident took place in December 2014. According to the corporate blog, two days ago BitPay filed a lawsuit against its insurer, Massachusetts Bay Insurance Company (“MBIC”), to recover the lost amount under a commercial crime policy. However, the company did not provide any additional details of pending litigation.

BitPay CEO Stephen Pair said in a statement:

“This was an isolated incident, and none of BitPay’s customers, affiliates or merchants lost any funds. The only victim of the theft was BitPay. All merchant funds were secure, and there were no disruptions to BitPay’s payment services at any time. Additionally, advances in bitcoin cybersecurity over the last year allow BitPay to further protect funds and better serve merchants and bitcoin users.”

BitPay is one of the leading bitcoin processing companies in the world. It was founded in 2013 in Atlanta, Georgia. According to the publicly available information, it processes more than $1 million in bitcoin a day.

A similar phishing attack against company's employees was used in a Bitstamp hack, which took place in early January 2015.

 

Roman Korizky