A virtual heist syphoned more than a million dollars' worth of Australian currency from the anonymous pay site, Bitcoin, The Australian Financial Review reported.
The hacker stole 410 bitcoins ($1.3 million) from a "Bitcon bank" where a collection of users kept their money.
"Tradefortress", the anonymous user who runs the online bank, notified customers this week after the theft occurred on Oct. 26. The faux banker told ABC News that he was a male from Sydney just over the age of 18, but he wouldn't give his name or any other information. He set up the service through a website called Inputs.io, which is registered to an address in Water Street, Hornsby, NSW, according to Financial Review.
''I don't recommend storing any Bitcoins accessible on computers connected to the internet," Tradefortress, who denies any wrongdoing, posted to fellow users.
Bitcoin is completely autonomous of government regulation and charges users a small fee for the right to hold and exchange money on ''one of the most secure web wallets on the market," according to its website. Its security and untraceable software make it exceedingly attractive to certain individuals. According to Bloomberg, bitcoins were going for $323 apiece in New York on Thursday night; at the same time, 30 transactions occured per minute.
The theft -- whether it turns out to be a true glitch in Bitcoin, an inside job, or something more -- will be the second time in a few months the pay company has been on the wrong side of the news. Users of the online drug website, Silk Road, used Bitcoin to pay for their illegal substances. That event, however, only temporarily hurt Bitcoin's operations, according to Bloomberg.
In response to Bitcoin's somewhat checkered past and its climbing profitability, the U.S. Senate Committee will meet on Nov. 18 to "to explore potential promises and risks related to virtual currency for the federal government and society at large," according to its statement on Friday.
According to Nicholas Colas, an analyst at ConvergEx Group, the hearing, titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies," should actually be beneficial to Bitcoin becuase it will uncovers some of the mystery surrounding the site, Bloomberg reported.
"Bitcoin is obviously getting a lot of attention from the federal government on the regulatory side," Colas said. "Given the involvement of the currency in illegal activities, that is entirely warranted. I expect these hearings to be largely informational, which is good for Bitcoin."
