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Bitcoin hack steals £8,000

Hackers have broken into Bitcoin brokerage, Bitinstant, taking more than $12,000 (£7,965) worth of the digital currency. The exchange has been quick to claim that no customers were affected – though the company website was knocked offline for a short period over the weekend.

The hack was a clever one, involving social engineering. The nefarious individuals behind it, managed to convince the company’s domain registrar, Site5, that the domain was changing hands. Said registrar gave control of the the site’s DNS and made the hacker’s email address the primary login.

After taking over the account, they could control Bitinstant email, which allowed them to empty Bitinstant’s accounts at the Virwox exchange.

Bitcoins have exploded in value recently

According to Wired, none of this would have been possible however, if it wasn’t for Bitinstant’s failure to use two-factor authentication. Instead, it only had a simple username and password. Fortunately for BitInstant, this was the only exchange where that was the case.

This isn’t the first, or the biggest Bitcoin hack ever and it’s unlikely to be the last. However its impact looks likely to be felt far further afield than just BitInstant’s Ewallet. The value of Bitcoins has been skyrocketing upwards in recent months, quadrupling in value since September 2012. However, the past few days have seen a slight dip in the currency’s value at Blockchain – the first in well over a year.

KitGuru Says: Bitcoin stocks have crashed before, leaving the coins valued at just a few dollars. It’ll be interesting to see if this new high point of almost $45 each holds strong.

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