A hacker infiltrated BlackWallet – an online vault used to store the digital currency Stellar Lumens (XLM) – and made off with more than £290,000 ($400,000) in safeguarded customer funds, it has been revealed. What’s even more alarming is how easy it was for the Bitcoin rival to be snatched.
The breach itself was straightforward. The attacker gained access to BlackWallet’s hosting account, then redirected incoming traffic to a clone of the website, which transferred Lumens to a different wallet when users logged into their accounts.
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“I am sincerely sorry about this and hope that we will get the funds back,” the creator of BlackWallet said in a statement. “I am in talks with my hosting provider to get as much information about the hacker and will see what can be done with it.”
The hacker stole around 669,920 Lumens, amounting to £319,103 ($438,546), according to Bleeping Computer. The funds were instantly moved to Bittrex Exchange, where they were converted into another currency to avoid detection.
This isn’t the first time a virtual wallet has been hacked – and it almost certainly won’t be the last. As cryptocurrencies are anonymous and unregulated, they’re the apple of many a hacker’s eye, so it’s important to store your cash offline.
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If you use an online vault, you run the risk of it being hijacked – as this cautionary tale proves. And as the value of virtual currencies is likely to continue to rise in the long run, the temptation for attackers to get a piece of the action will only intensify.
Folks affected by the BlackWallet hack probably won’t get their money back, but you can protect yourself from winding up in the same position by picking up a Ledger Wallet – an encrypted USB vault used to stockpile cryptocurrencies.
Have you ever been the target of a cryptocurrency hack? Let us know on Facebook or Twitter @TrustedReviews.