Bitcoin Rocked By Java Exploit-Wielding Thieves And New DDoS Strike

More security threats are pounding Bitcoin firms and users, as a Java exploit is thought to have been used to steal bitcoins, whilst the biggest exchange was hit by another sizeable denial of service attack today.

Warnings on a fresh kind of bitcoin theft emerged on Reddit earlier this week. Another Bitcoin user complained of a cross-site scripting attack, where he was duped into following a link on BTC-E, another exchange, claiming Mt.Gox was to start trading “Litecoins”, a Bitcoin alternative.

They would later discover bitcoins had been siphoned from their Mt.Gox account, leaving them with just “less than a third of a bitcoin”, according to a post on the Bitcoin Forum.

Hackers hot for Bitcoin

The site he/she was tricked into visiting was a clone of bitcoincharts.com, branded with a Mt.Gox logo, which was registered just last week. The malicious site not only carried out a cross-site scripting attack that automatically began transferring bitcoins out of the account, they claimed, but served up malware with a keylogging function.

That malware also stole the users’ passwords, before sending them to the user, according to the post.

From the Reddit post it also appears a fake Adobe Flash installer is being used by the attackers. It was later claimed by the user that it was the Dark Comet RAT (remote administration tool) that was used to pilfer data from the victim.

“Mt.Gox has clearly not had time to respond, and I fear they will claim this is my fault as I have seen in other posts online that they say ‘report it to the police’,” the user wrote. “They should compensate me 100 percent.”

At the time of publication, Mt.Gox had not responded to TechWeekEurope’s queries about the alleged attacks.

More DDoSing

Meanwhile, Mt.Gox itself reported on its Facebook page it was facing a “stronger than usual DDoS” early this morning, which has now been fended off. It came just after the end of a 12-hour shut down at the biggest Bitcoin exchange, while the company sought to improve its infrastructure to counter further DDoS attacks and trade engine lag that came as a result of “astonishing growth”.

“Technically speaking, we are now ready to better handle our exchange’s rapid growth and assure normal operation,” it said just two hours before it reported this latest DDoS.

It had previously been hit by sizeable DDoS strikes, reaching traffic rates of as high as 80Gbps. A Mt.Gox spokesperson told TechWeek earlier this week it was hit by DDoS attacks on a “daily basis” and the group’s security budget had gone up “a lot” in recent months.

Whilst they appear solely destructive, there is profit to be made from DDoSing such Bitcoin businesses.  They could be extorting exchanges, asking for money so they don’t initiate their attacks and knock their targets offline, but attacks can also be used to influence the “crypto-currency” in their favour.

“Criminals could be DDoSing exchanges in order to undermine confidence in the virtual currency,” said Brian Honan, founder of the Irish Reporting and Information Security Service, Ireland’s first CERT, told TechWeekEurope.

“By preventing access to the exchanges the criminals can stop people buying and selling their Bitcoins which would leave them nervous about the viability of the currency and be more inclined to sell off their Bitcoins. As people panic dump their Bitcoins the criminals can then swoop in and buy these cheaply to profit from them later.”

Experts also believe malware aimed at Bitcoin will only propagate at greater speeds in the future. “Investing now in malware to steal bitcoins is a bit of a no brainer if you have criminal intent,” added Professor Alan Woodward,  from the Department of Computing at the University of Surrey.

“Users should remember that Bitcoin is just cash and that if have your electronic pocket picked you are unlikely to ever see your money again.

“Whilst the protocol is open source so people can analyse it to see if they can trust it, we have already seen technical problems with branching of the blockchain [the online record of every Bitcoin transaction].

“It is really still an experimental system and subject to all the problems of upgrades, bugs and the like.”

At the time of publication, Bitcoins are trading at $74, down from a high of around $260 earlier this week.

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