2014-05-13 01:14 PM
Dogecoin Wallet Hacked, Goes Offline Amid Theft Allegations
Doge Vault, one of the most popular wallets for meme-inspired Dogecoin which has been offline since Sunday, said it has been hacked and its funds compromised, as one user claimed that nearly $500 worth of the currency had been stolen from his account.
Doge Vault administrators said they halted service as soon as they were aware of the attack on May 11, but that the hackers had already destroyed the wallet’s data.
“We are currently in the process of identifying the extent of the attack and potential impact on user’s funds,” a statement posted on the Doge Vault site Tuesday said. “We will also closely be investigating potential attack vectors, and determining the security breach which enabled the attacker’s [sic] to compromise the service.”
The statement said Doge Vault’s wallet funds had been “tampered with,” but did not confirm whether money had been stolen.
However, there is evidence that the hackers stole at least part of Doge Vault’s assets. Reddit user TheStodo said that almost his entire Doge Vault account balance of over 943,000 dogecoins was transferred to another wallet on Sunday, leaving just five coins in the account. He posted a screenshot of the transaction history Monday on Reddit, expressing concern over the problem and asking the community for any new information.
“This is not a post about me complaining about losing Doge…[but] I realized I lost a very large amount of Doge AND the website went down in the same day, so I simply want to warn others,” he wrote.
The Dogecoin price against the US dollar dropped as news of the possible theft has spread, falling 0.90% in the last 24 hours, according to ForexMinute.
The currency was trading around 2,165 dogecoins to the US dollar on Tuesday according to tracker site dogepay.com, putting the Doge Vault user’s losses at about $465.
Doge Vault, created and maintained by computer coder Asad Haider, did not release a statement or any information about the problem for two days, posting only a short notice on its site asking users not to transfer any funds to Doge Vault addresses until the longer statement was published Tuesday.
Doge Vault’s official Twitter account and blog have also not been updated since the website went down on Sunday.
Though Doge Vault kept silent on the problem until Tuesday, Dogecoin co-founder Jackson Palmer responded quickly to the user’s theft allegation, posting on Reddit Monday that he had discovered the user’s missing money in a “mega wallet” containing some 111 million dogecoins ($51,000) after tracing the site’s transaction history.
“My hope is that this is Dogevault’s cold wallet system in action and that everything will be OK once it’s back online,” Palmer wrote. “Let’s wait and see.”
This isn’t the first time that Dogecoins have gone missing – over $16,000 worth was heisted by hackers from Dogewallet on Christmas Day last year. Billy Markus, Dogecoin’s co-founder, told ABC News that new security protocols would be put in place as a result of the theft.
The popular altcoin is not the only crypto-currency to suffer massive loss from hack attacks (if that turns out to the source of Dogecoin’s trouble). Tokyo-based Bitcoin exchange Mt. Gox, which was previously handling 70% of all Bitcoin transactions, filed for bankruptcy earlier this year. Its owners claimed hackers had exploited a system weakness to steal over US$500 million in bitcoins. Bitcoin bank Flexcoin was also forced to shut down after it was cleaned out by hackers in March.
Dogecoin, a crypto-currency based on wildly popular internet meme featuring the Japanese dog breed Shiba Inu, was founded last December. Over 77 billion dogecoins have been mined so far from an available 100 billion, according to Dogechain.com