Bank robbery can be such a hassle these days, what with all the security measures in place like time locks on vaults, dye and CCTV cameras everywhere, not too mention the need for weapons, get away cars and the like. Which is why the smart criminals have their sights set on a different kind of heist, hijacking digital currency exchanges that trade in the popular cryptocurrency Bitcoin.

In the latest digital robbery to hit the headlines, thieves have made off with the equivalent of $990,000 worth of Bitcoin after successfully hacking into Bitcoin Internet Payment Services (BIPS), one of the largest bitcoin payment processors in Europe, according to an announcement on its website. All told, 1,295 Bitcoins were stolen in the latest blag, said BIPs founder and CEO Kris Henriksen in a post on its forum.

For those unfamiliar with BIPS, it offers a service for merchants that allows them to accept Bitcoin as payment and exchange them for hard dollars, euros and other currencies. Most of its customers store their Bitcoin in digital wallets held by BIPS, which are essentially their ‘bank accounts’. And its these wallets that disappeared last Friday, according to Henriksen.

BIPS gave a full account of how the heist unraveled. First, the attackers carried out a distributed denial of service (DDoS) attack on the site, directing so much traffic at it that its servers couldn’t handle it and shut down. This allowed the criminals to discover a vulnerability within BIPS security protocols, and was followed by a second DdoS attack two days later, during which the company’s network was also hacked. Once inside, the thieves gained access to BIPS’ storage systems, transferred all of the money in its customer’s Bitcoin wallets to their own, before making off with the loot.

Following this admission, Henriksen then tried to shoulder some of the blame onto his customers, telling them that “Web Wallets are like a regular wallet that you carry cash in and not meant to keep large amounts in.”

Not surprisingly, this provoked a bit of a reaction from some of those who were using BIPS’ services, and fell victim to the robbers. One user, who goes by the name cubicdissection, wrote the following reply on the Bitcointalk forum:

“As someone who pursues and gets merchants to sign up for your service, you surely realize that many if not most of them are not well versed in Bitcoin. At NO point did you EVER say hey you shouldn’t keep your BTC with us. In fact, your website said: Your data is secure at BIPS … BIPS protects your payment information with industry-leading security and fraud protection. … So yeah, I felt pretty god—- secure leaving my BTC balance there. … So basically ALL balances are gone?”

A busy month for Bitcoin robbers

Unfortunately the BIPS theft is not an isolated case. With Bitcoin’s sky-rocketing value – rising 6,000 percent against the dollar over the last 12 months – the incentive for hackers has increased exponentially.

Aside from BIPS, the Polish Bitcoin site Bidextreme.pl also fell victim to hackers last week, although the company didn’t disclose how much was stolen. One week before, the Czech Republic-based exchange Bitcash.cz was also hit, with around $100,000 worth of cryptocash stolen from user’s wallets.

And it’s not just European exchanges that have had to suffer – earlier this month, Australia’s TradeFortress also admitted to being hacked, with $1 million worth of Bitcoin going missing. Then there’s the more mysterious case of China’s GBL, which abruptly shut up shop last month, taking with it a whopping $4.1 million worth of its customer’s Bitcoin.

Bitcoin dealers, beware…

photo credit: gfairchild via photopin cc