Bitcoin Lender BTCJam Reports No Customer Funds Lost in Hack

P2P bitcoin lending startup BTCJam has said no funds were lost after a security breach at its mail provider.

AccessTimeIconAug 12, 2014 at 11:23 p.m. UTC
Updated Sep 11, 2021 at 11:03 a.m. UTC
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BTCJam has suffered an apparent security breach that affected an unknown number of users.

The peer-to-peer lender was quick to reassure its clients that no bitcoins had been lost from their accounts. A spokesperson said the incident was the result of a hack at its email provider, which allowed the attacker to access funds belonging to customers with low security settings.

started experiencing some issues over the weekend and was offline on Sunday.

— BTCJam (@btcjam) August 10, 2014

BTCJam reassures users

The latest issue was reported by a BTCJam user on Reddit. The user said the site was down and support had not yet responded to requests for assistance.

Chief product officer Gustavo Guida responded to the thread saying the company was working to get its services back up.

“The majority of our coins are in our cold storage and no users will lose any bitcoins at all,” he added.

Guida said BTCJam is investigating the issue. A few hours later it was up and running again; Guida apologised for the downtime.

The company later posted on its public blog:

"A recent hack at our email provider Mailjet allowed a hacker to gain access to some of the transactional emails of BTCJam for a period of two hours. Through this, he was able to initiate unauthorized transactions from a small amount of users who did not have Two Factor Authentication enabled.

The problem is now solved and no users have lost any bitcoins as a result of this."

The article added that as a security measure, the lender would move the most critical transactional emails to its own server and strongly encouraged users to enable two-factor authentication.

Investigating the situation

Shortly after services were restored, Guida said the company managed to identify just “a few” invalid transactions.

“We are finishing our investigations and will reinstate the affected accounts back to the previous state so no bitcoins will be lost at all,” he said.

In the meantime other users reported downtime and suspicious transactions, but for the time being it appears this was a minor issue which did not cause any significant disruptions or losses.

BTCJam is a startup based in San Francisco with the goal to bring peer-to-peer lending to a global audience. Using bitcoin allows BTCJam to approve loans and transfer the funds almost instantly regardless of location. The concept can also be used to provide quick loans to unbanked people in developing regions.

Image via Shutterstock


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