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Polish Bitcoin Exchange Bidextreme.pl Hacked, Bitcoin and Litecoin Wallets Emptied

| Published on November 20, 2013 at 18:14 BST

Poland’s digital currency exchange Bidextreme.pl has been hacked and its customers’ bitcoin and litecoin wallets have been emptied.

In a statement published on its website, the platform said it decided to temporarily suspend all activities until the matter is resolved. The incident was reported to the law enforcement authorities, the company said.

The amount of digital currency stolen was not disclosed by the platform, which was founded in 2013.

Local observers say the attack could hamper the development of Poland’s bitcoin market, even though bitcoin trading is becoming increasingly popular in Poland and the number of companies accepting payment for services and goods in bitcoins is steadily rising.

The incident, which took place on 18th November, follows a similar attack that happened a week earlier in the Czech Republic.

Czech bitcoin exchange Bitcash.cz was hacked and up to 4,000 customers’ wallets were emptied, after which, the company’s site was shut down.

A statement from Bidextreme.pl said:

“Should the [digital currency] be retrieved, it will be returned to the users according to the balance from 17th November 2013. The users’ funds which were deposited on the platform’s bank accounts are safe.”

Mariusz Pilas, chief executive of Magnus Ltd, which owns Bidextreme.pl, released a statement in which he revealed that the platform’s development plans had been put on hold following the attack.

“We deeply regret that we need to temporarily suspend the Bidextreme.pl platform whose [market] potential had been developing at an impressive growth rate,” Pilas said. “This caused a great financial loss for us as well.”

In his statement, the chief executive said his company has begun to return the funds that its users deposited in Polish zloty (PLN) on the platform’s bank account.

According to the chief executive, Magnus Ltd has a total worth that exceeds the budget of Bidextreme.pl and the value of the stolen digital currency “many times”. Pilas added:

“Magnus Ltd is successfully carrying out high-budget projects co-financed by the European Union for public entities, and is enjoying their confidence.”

The company is headquartered in the city of Olsztyn, Poland, located in the country’s northeast. The Economic Crimes Department of the Municipal Police in Olsztyn is currently investigating the case, Pilas said.

According to the company’s website, Magnus is developing training and educational projects for the elderly and the unemployed. Its other areas of activity include advisory services, debt recovery and educational services.

Meanwhile, the handling of the case could be further complicated by the fact that the question of bitcoin’s legal status still has not been resolved in Poland.

A policy document signed by the country’s Deputy Minister of Finance Wojciech Kowalczyk and released in July outlines the ministry’s stance on the use of bitcoins in financial transactions carried out in the Polish market.

polish moneyThe document states that, under Polish law, bitcoins cannot be considered a currency, as they currently are not universally treated as a currency by Poles.

In spite of this, transactions made in bitcoins are nevertheless subject to taxation, according to the ministry.

Local news daily Gazeta Wyborcza reported that, prior to the attack on the company’s site, Bidextreme.pl was the second largest digital currency exchange platform in Poland.

According to data obtained from Bitcoincharts on 20th November, Bidextreme.pl had a 30-day volume of 199.71 BTC and 186,469 PLN ($59,670). The platform’s six-month volume was 540.48 BTC and 315,777 PLN ($101,048).

In comparison, according to the same source, local bitcoin exchange Bitcurex.pl had on 20th November a 30-day volume of 37,955 BTC and 42.48m PLN ($13.6m).

Set up in 2012, Bitcurex.pl is operated by local firm Digital Future, headquartered in the city of Łódź, Poland.

The incident is not the first case of major bitcoin loss in Poland.

In July 2011, users of local bitcoin exchange Bitomat.pl lost all their digital currency due to a system failure which erased all the user data from the platform’s server, resulting in the loss of some 17,000 bitcoins.

The website was subsequently shut down and its domain taken over by Mt. Gox.

The acquisition allowed the Tokyo-based business to become a major local player after it migrated Bitomat.pl’s users’ accounts into its system.

Prior to the incident, the Polish website was believed to be the world’s third largest bitcoin exchange at that time.

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