Category Archives: Bitcoins

CoinTerra, Yet Another Troubled Bitcoin Miner Startup, Goes Bust

The venture-backed Bitcoin startup CoinTerra has filed for bankruptcy, making it the second major miner manufacturer to do so in recent months.

The Chapter 7 filing, which begins the process of liquidating company assets, was submitted on Saturday and comes just weeks after a Utah-based data center sued CoinTerra over a contract dispute.

In June 2014, CoinTerra was sued by a California man for failing to deliver his miner on time. According to court filings, CoinTerra has $10 million to $50 million in combined estimated assets and liabilities and around 400 creditors spread out worldwide from Canada to Russia to Hong Kong.

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Researcher Links 20 Percent of Ulbricht’s Bitcoins to Silk Road Accounts

Ross Ulbricht was back in a Manhattan federal courtroom today facing drug trafficking and money laundering charges for allegedly running the Silk Road online drug marketplace. We’ll have a story on today’s court action posted shortly.

A few hours ago, computer security researcher Nicholas Weaver published some analysis about bitcoins he says came from Ross Ulbricht’s accounts. If the government has done a similar analysis—and there’s no reason to think they couldn’t—it will be one more obstacle for Ulbricht’s defense team.

Last week, the outlines of Ulbricht’s defense became clear. Ulbricht’s lawyer Joshua Dratel admitted that his client founded Silk Road, but said Ulbricht walked away from the site only to be “lured back.” During opening statements, the defense attorney acknowledged that Ulbricht, who had 144,000 bitcoins on his computer seized by the feds, made money from Bitcoin. Dratel said this was, at least in part, from being a successful trader in the digital crypto-currency.

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Silk Road Judge ‘Eviscerates’ Defense’s Evidence That Mt. Gox CEO Was a Suspect

Silk Road Judge ‘Eviscerates’ Defense’s Evidence That Mt. Gox CEO Was a Suspect

Just as quickly as the Silk Road’s defense created an alternate theory that the massive drug market was run by Mt. Gox CEO Mark Karpeles, the prosecution and judge in the case have now shoved key elements of the story back into the closet.

The post Silk Road Judge ‘Eviscerates’ Defense’s Evidence That Mt. Gox CEO Was a Suspect appeared first on WIRED.



Bitstamp Reopens Bitcoin Exchange, Adds Security Precautions

Major Bitcoin exchange Bitstamp reopened its virtual doors late Friday, four days after it suspended services because of an online theft of 19,000 bitcoins valued at more than $5 million.

Bitstamp, the second largest Bitcoin exchange for US dollars, moved its system to Amazon’s cloud services and added additional security features to make compromises more difficult, Bitstamp’s CEO Nejc Kodrič said in a statement on the company’s website.

“By redeploying our system from a secure backup onto entirely new hardware, we were able to preserve the evidence for a full forensic investigation of the crime,” he said. “While this decision means we have not been able to provide you with services for a number of days, we feel this extra measure of precaution was in the best interest of our customers.”

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Bitcoin Exchange Bitstamp Claims Hack Siphoned Up to $5.2 million

UK-based Bitstamp, the second largest bitcoin exchange for US dollars, suspended operations on Monday, following evidence that online thieves had stolen up to 19,000 BTC—approximately $5.2 million—from its operational store of bitcoins.

The company alerted its users of the possible attack on Monday and warned against transferring any bitcoins to the service’s old bitcoin deposit addresses. Early the following morning, Bitstamp revealed that the attack affected fewer than 19,000 bitcoins. The actual attack appeared to have occurred on Sunday, January 4, when attackers compromised the company’s operational funds, also known as the “hot wallet.”

“Thank you all for your patience, we are working diligently to restore service,” Nejc Kodrič, the co-founder and CEO of Bitstamp, tweeted on Monday, adding, “To restate: the bulk of our bitcoin are in cold storage, and remain completely safe.”

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Feds Will Auction off $19 Million in Bitcoins from Alleged Silk Road Kingpin

On Monday, the US Marshals Service (USMS) announced that it will auction off 50,000 bitcoins belonging to Ross William Ulbricht. Ulbricht, allegedly under the moniker Dread Pirate Roberts, is suspected of running the first Silk Road, the hidden website that was often used to traffic drugs and other illegal sales. Ulbricht had 114,000 bitcoins stored on his various computers when the devices were seized by federal authorities during an arrest in San Francisco last October.

The USMS auction will take place on December 4. Today, a bitcoin is worth about $377.60, making the assets up for auction worth around $18.88 million.

The announcement comes several months after an initial auction of bitcoins taken from the Silk Road’s servers. In June, venture capitalist Tim Draper bought almost 30,000 bitcoins for $18 million. (Five months ago, bitcoins were worth about $200 more per unit than they are today.) The auction itself went off relatively smoothly, but not until after the USMS sent an e-mail CCing, rather than BCCing, all those interested in it.

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Dorian Nakamoto, Fingered as Bitcoin Creator, Wants to Sue Newsweek

In March, Newsweek came roaring back to the print world with a tech-themed cover story. The publication said it had discovered “the face behind Bitcoin”—an unemployed engineer living an unassuming life in a Los Angeles suburb.

Within days of publication, critics began pointing out that the magazine’s case that Dorian Nakamoto was actually Bitcoin creator Satoshi Nakamoto was based on circumstantial evidence. The 65-year-old Dorian Nakamoto, who has no background in cryptography at all, denied the story after it was published. Newsweek and author Leah McGrath Goodman did not apologize and instead doubled down on their thesis, putting out a statement that “the facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin.”

Now, Nakamoto and his lawyer Ethan Kirschner have made clear they’d like to sue Newsweek over the story—but they need more money to do it. The two have created a website called “Newsweek Lied,” which lays out their grievances and features a photo of Dorian Nakamoto holding a sign saying “Newsweek’s article hurt my family.”

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