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European Bitcoin payment processor BIPS was the victim of a cyberattack that resulted in the theft of 1,295 Bitcoin worth an estimated $1 million.

The company says it was the target of a Distributed Denial of Service (DDoS) attack in mid-November while the attackers also sought to gain access to users’ online wallets, making off with the sizable cash of Bitcoin.

“This is the biggest one we’ve seen at BIPS so far, and we are working hard to launch new load balancers to handle the massive traffic. Sorry for any and all inconvenience, It’s 5am and we got woken up by the alarms,” a company spokesperson posted on Reddit.

“The attack targeting BIPS… has been found to originate from Russia and neighboring countries. We are trying to concentrate on this area for blocking offending IP addresses, so as to not block legitimate users,” the spokesperson continued.

BIPS has an estimated 20,000 customers, and offered Bitcoin storage and payment processing for merchants who accept the digital currency. The attack led the company to suspend Bitcoin storage, while it continues to process payments for merchants.

“To protect the successful merchant processing business BIPS has decided to temporarily close down its consumer wallet initiative… As a consequence BIPS will temporarily close down the wallet initiative to focus on real-time merchant processing business which does not include storing of Bitcoins. Subsequently BIPS will consider to reintroduce the wallet initiative with a re-architected security model,” the company said in a press release.

BIPS’ CEO Kris Henriksen said  that “most of the missing funds were from our company’s own holdings,” and did not disclose how many customer accounts had been compromised.

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  • This is a little tangential, but it occurs to me that the new generation of cryptolocker malware would be rendered much less profitable if the Bitcoin payment processors made a special Bitcoin available for making the private key purchase. The purchase would occur as normal, but no funds would transfer because this special Bitcoin would have no value. There are a number of details to make it practical, but does anyone have an opinion on that?

  • They really should and it is the best thing for them to do is to shut down their wallets. Payment that is done through this system should have strict protection to avoid this happening. Machines, software’s and technologies are just man made and it will never be a surprise if this will happen.

  • Kashfiya Rafa

    CryptoCafe is going to be big in the world of Bitcoin, be sure to sign up for the big release announcement. Thanks !

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  • Simleu

    I hope the situation would be remedied as soon as is possible, I just don't like the idea of those hackers stealing the goods of people.

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