Hackers steal $1 million from Aussie bitcoin service

Hackers have stolen more than $1 million dollars’ worth of bitcoins from an Australian bitcoin wallet service, according to the operator of the service.

The operator, who goes by the handle TradeFortress, said more than 4100 bitcoins were stolen from the service. Together the bitcoins were worth about $1.1 million at the time of the alleged theft.

TradeFortress operated the wallet service through the website Inputs.io. The site allowed customers to store their bitcoins on the service for a fee.

The stolen bitcoins belonged to customers of TradeFortress’ service.

TradeFortress is thought to be male and claims to be not much older than 18. He does not want to be identified for fear of compromising his personal safety, and said he is unlikely to report the theft to the police.

"The police don’t have access to any more information than any user does when it comes to bitcoin," TradeFortress said.

TradeFortress told Fairfax he would try to refund some of the stolen money to affected users, using his own bitcoins and some not taken by the thieves.

"Users are being repaid up to 100 per cent depending on the amount (sliding scale), generally 40-75 per cent," he said. "I won’t have any bitcoins left after this, except for a small amount of commemorative physical coins.”

“I’m repaying with all of my personal bitcoins, as well as remaining cold-storage coins on Inputs, which adds up to 1540 BTC,” he told Wired.

The operator denied accusations that the theft was an inside job and that he took the bitcoins.

“Some people think I have their money. I don’t and I’m using my personal coins to compensate users, yet there’s some ugly messages I’m receiving,” he said.

He said the hackers were able to bypass the two-factor authentication protecting the server that hosted the bitcoins.

A notice on the Inputs.io site said: "I know this doesn’t mean much, but I’m sorry, and saying that I’m very sad that this happened is an understatement."