Bter to Return 'Hacked' Funds Following Security Partnership

NEWS
Grace Caffyn
Mar 12, 2015 at 13:52 UTC  |  Updated  Oct 23, 2015 at 14:12 UTC

'Hacked' altcoin exchange, Bter, has outlined a plan to payback users after inking a deal with security firm Jua.com.

The Chinese platform reported that hackers had absconded with 7,170 BTC (roughly $2.1m at press time) on 14th February after accessing its cold wallet storage system. If verified, the figure would make the attack the second largest this year.

In a post on its reopened website yesterday, Bter said users will be repaid in batches using future profits and a 1,000 BTC interest-free loan from Jua.com.

An update to its Twitter page earlier today reads:

However, certain trading data, including the platform's bitcoin, yuan and dollar charts, appear frozen at press time.

Jua.com partnership

Previously, Bter had considered selling its platform to make users whole, telling CoinDesk it did not have enough funds to reimburse those affected.

"Hopefully a qualified party (especially a trusted security team) will take charge of it in the future," a spokesperson said at the time.

Alongside the 1,000 BTC loan, which will be provided in exchange for equity in Bter, Jua.com will now handle all the platform's cold wallet security.

Bter said:

"Working with Jua.com, we reviewed all the security-related code on Bter completely and rebuilt the back-end, and trust all our cold wallets to our partner for specialised security storage, making a solid security foundation for Bter's re-opening."

Control of Bter's hot wallets, used for deposits and withdrawals, will be moved over to Jua.com gradually, the exchange added. The company, which claims to provide enterprise security and storage services for bitcoin companies, runs BW.com, currently bitcoin's 3rd largest mining pool.

Customers willing to trust the new escrow provider with their funds will receive one-month's free trading on the platform.

Missing funds

Bter's missing funds have now been tracked to a coin mixing service, Bitcoin Fog, with the help of "security teams and ... kind cryptocurrency enthusiasts", the exchange said.

It is unclear whether these parties will be entitled to the 750 BTC bounty previously offered to blockchain experts willing to "chase back" the funds. Additionally, attempts to contact Bitcoin Fog have so far been unsuccessful, according to the exchange.

As bitcoin's public ledger, analysts have been using the blockchain to track and visualise the movement of funds in a number of high-profile security stories.

Blockchain analyst Danno Ferrin used data from the ledger to reveal Bitstamp's race to protect $1.75m in bitcoin following its hack in January.

Additionally, a white-hat hacker named 'johoe' was able to take over 267 BTC from Blockchain wallets in December after discovering a security flaw. He later returned the funds.

Image via Shutterstock 

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