Bitpay got hacked for $1.8 million in bitcoins

The cryptocurrency ecosystem has been once again rocked by a massive hacking scam. According to latest reports, Atlanta's Bitpay Inc., a global bitcoin payment service provider, got hacked for over $1.8 million in bitcoins.

A lawsuit has been filed on September 15 in Atlanta federal court. It says that Bitpay’s chief financial officer Bryan Krohn received an email from David Bailey claiming to be with a digital currency publication requesting him to comment on a bitcoin industry document.

Unknown to Mr. Krohn, or anyone at Bitpay, Mr. Bailey’s computer had been hacked. The phony email sent by the person who hacked Mr. Bailey’s computer, directed Mr. Krohn to a website controlled by the hacker wherein Mr. Krohn provided the credentials for his Bitpay corporate email account. After capturing Mr. Krohn’s Bitpay credentials, the hacker used that information to hack into Mr. Krohn’s Bitpay email account to fraudulently cause a transfer of bitcoin, valued at $1,850,000, the lawsuit said.

Atlanta Business Chronicle reports that the transfer was a total of 5,000 bitcoins in three separate transactions, according to court documents.

Bitpay made a claim to its insurer to cover $950,000 of the loss, but in June the insurer declined to pay. Bitpay is now suing the insurer.