14 DAY TRIAL // On April 7, the ShapeShift Bitcoin trader suffered a data breach during which the company's servers were accessed by an unauthorized party that appears to have stolen some funds, but nothing belonging to its clients.
ShapeShift CEO, Erik Voorhees, says that the attackers only made off with funds from what the company calls a "hot wallet inventory fund," which is its own Bitcoin stock, used to intermediate transactions until the real ones get approved.
Hackers didn't steal Bitcoin from customers
By design, ShapeShift is unique among all other Bitcoin traders because it doesn't require users to create accounts. The service lets users transfer funds from one Bitcoin wallet to another using a universal transactions dashboard.
It's because of this unique design that the attackers weren't able to steal any funds from the users utilizing ShapeShift's service.
"By design, ShapeShift doesn't hold customer balances, so even in the case of a security breach, there is no customer money at risk," said Mr. Voorhees. "We've built customer protection into our platform – hacks may be inevitable, but customer losses should not be. Not a cent of customer funds was lost, nor could they have been."
ShapeShift will rebuild its entire infrastructure from scratch
Following the incident, ShapeShift staff took down the website, and just to be on the safe side, they decided to rebuild their entire infrastructure. No timeline has been provided on when this operation will conclude.
Last March, a similar incident happened to another Bitcoin trader, BitQuick, who, was also forced to shut down for two to four weeks to upgrade its infrastructure. Even worse, following an intense series of cyber-attacks, CoinKite decided to pull the plug on its Web-based trading service and continue with its Bitcoin hardware products instead.
ShapeShift doesn't plan to go this route, though, and its CEO has clearly stated that the service will continue to operate. Before suffering this breach, ShapeShift was one of the few services where users could also trade in Ether, a new crypto-currency that works on the newly launched Ethereum blockchain platform.
