The Bitcoin service Bitalo found itself the victim of a DDoS attack and put a 100 BTC bounty on the hacker’s head.
Martin Albert, Bitalo CEO, told that the attack started last weekend and lasted for two days. The attacker, known as DD4BC, sent an email to say the Bitalo site was accessible to DDoS and that he had started an attack, and that the company could only stop it by paying him bitcoin.
“Immediately we figured out it was not an unknown guy; it was this guy who also threatened many other people,” Martin Albert.
He named Bitcoin sportsbook Nitrogen Sports and exchange CEX.io as previous victims to the scheme.
The company refused to pay the extortion money and put their bitcoin into a reward for whoever identifies the hacker instead. The company is offering 100 BTC through the Bitcoin Bounty Hunter site, which is equivalent to around $32,000 at today’s rates.
Bitcoin Bounty Hunter was launched by cryptocurrency evangelist Roger Ver in September as a means to incentivize people to catch troublemakers targeting the Bitcoin community. He was personally offering 37 BTC reward to track down someone who hacked his email, who he thought to be the same person that got into Satoshi Nakamoto’s email account in September.
“Somebody hacked an old email account of mine and then was claiming they were going to steal my identity,” Roger Ver said. “People from all over the world started contacting me and claiming to have information,” he said.
Ver conceived of Bitcoin Bounty Hunter, that allows anyone to offer information and claim a bounty anonymously. Using the site proofofexistence.com, one can send in the details via a zero-knowledge proof, which basically proves that he knows something without revealing the contents of what he knows. One can point to the information he provided and claim the bounty.
The Bitcoin Bounty Hunter website says that for the bounty to be paid, the target must be arrested and convicted.
Martin Albert suggested that most people who attempt to squeeze bitcoin in this manner may also be involved with other bitcoin services, and in this way revealing the ransomer would be enough to solve the problem.
“The biggest harm to him is also to be revealed, because then he cannot do any business any more,” Albert said.
However, Roger Ver said: “The police in California did absolutely nothing to help, they didn’t even lift a finger. Going to the police, traditionally, they don’t do much of anything to help at all. By providing a bounty I think you can provide an incentive to have anybody—including the police—to actually do the right thing and help victims of crimes.”
Martin Albert said the bounty is also a way of showing his company is serious. He stated that no one’s funds were ever at risk because of the company’s multi-signature setup, but that extortionists like this presented a wider threat to the Bitcoin community by targeting the small start-ups that make up the global scene.
“These kind of people can do much more harm to the community than any government by regulation or something like that, in my opinion,” he said. Besides, If the hacker isn’t caught, they don’t have to pay. The bounty’s expiry date is December 31, 2015.