The letter:
As much as I regret the post I am about to write I feel that it is only fair and holding to the spirit of BitFloor that I disclose everything that is going on and make the information available. Please read the entirety of the post. As always, if you have any questions please post them here versus contacting support so that other users may benefit from the answer (unless it is private).
Last night, a few of our servers were compromised. As a result, the attacker gained accesses to an unencrypted backup of the wallet keys (the actual keys live in an encrypted area). Using these keys they were able to transfer the coins. This attack took the vast majority of the coins BitFloor was holding on hand. As a result, I have paused all exchange operations. Even tho [sic] only a small majority of the coins are ever in use at any time, I felt it inappropriate to continue operating not having the capability to cover all account balances for BTC at the time.
Due to the serious nature of what has happened I am currently evaluating options for BitFloor. One of the last things I want to happen is for BitFloor to shutdown and cause more panic in the bitcoin community. The platform itself is very valuable and provides an important and friendly service to many users.
BitFloor is very much focused on the end user and creating a reliable and trusted platform for everyone. Through exchange user support, I can continue to operate BitFloor. I believe that posting the exchange source and being even more transparent about operations would be a step in this direction if we were to continue operating. BitFloor is currently the #4 USD exchange and #1 in the US.
As a last resort, I will be forced to fully shut BitFloor down and initiate account repayment using current available funds. I still have all of the logs for accounts, trades, transfers. I know exactly how much each user currently has in their account for both USD and BTC. No records were lost in this attack.
I realise that saying that I appreciate everyone’s understanding is a moot point, however I do wish to re-iterate that my goal is to find the best and most reasonable way forward for BitFloor customers and the exchange and not create more panic that the community has already seen time and time again.
I would like to keep this thread focused on evaluating ideas of BitFloor operation and will create a separate thread for discussion (see below) about the actual transactions and tracing the coin theft. I will not speak at detail about the actual breach at this time as my current focus is on the future and not the past.
In the intrest of information for tracking stolen coins:
https://bitcointalk.org/index.php?topic=105819.0
~Roman
[The Register, BitcoinTalk via ArsTechnica]
Surely this was an inevitability just waiting to happen. As I understand it (please correct me if I'm wrong), there's no way to trace stolen coins making this an ideal target.
Annnnnd since when does anyone care anymore?
annnnd who in their right mind would entrust real currency to these jokers??!??
Honestly, have bitcoins even been used for something that can't be bought (or at least, a simmilar service) with a regular currency, because even the illegal drugs and firearms can be bought with regular money. The only thing I can think of are websites for people in Authoritarian Countries, but that is only because only the sorts of people who think bitcoin could succeed (not only succeed, but overtake regular currencies that the majority of people have no problem using) would think that there is money to be made from oppressed people.
So yeah, no surprise here at all.
The only surprising thing here is that Bitcoins were/are still around, this isnt the first time , they just dont appear to be a safe currency system to use.
So real money never get's stolen from banks guys?
The wallet was stolen and these people were stupid enough to leave the keys in it unencrypted - this is no different to someone leaving their wallet on the table in a restaurant and then crying foul that someone stole the contents!
Do people not understand fiat money creation? When your central bank creates money by using a debt instrument (money that didn't exist beforehand) then they automatically expand the money supply which devalues the currency which is seen as inflation - bitcoin removes all this, it doesn't allow governments control of the money supply, it stops inflation because the bitcoin supply cannot be expanded and it removes banking fee's on lending you money and charging you interest, on money they never had owned in the fist place (see fractional reserve banking).
The current fiat money system is robbing you blind and now there is an alternative and you rubbish it and would rather stay under a system that has robbed countries of it's wealth over the years - amazing!