Recently revealed court documents have shed light on the inner turmoil at Bitcoin company BitPay. The Atlanta, Georgia based company lost 5000 bitcoin in December of 2014 after the Chief Financial Officer’s email was hacked. Following the email compromise, the hacker was able to spoof emails to the CEO, and request amounts totaling to 5000 BTC on three separate occasions. BitPay proceeded to file an insurance claim for the amount for the money, but was denied in June of 2015. BitPay has since sued their insurance company.
With a social engineering attack such as this, even if BitPay’s top brass was using their own product, CoPay, this still could have happened.
Also read: BitPay Releases CoPay After Successful Testing
BitPay Loses Bitcoin and Bitcoin Community
The complete details of the lawsuit filed by BitPay against their insurance company can be found here. To see the insurance claim, hack details, interchanged emails between BitPay and the insurance company, look here. For months, unconfirmed reports from anonymous Reddit accounts claiming to be former BitPay employees have been talking of inner turmoil between BitPay’s upper management. This follows the noticeable downsizing of personnel, which the management then attributed to lack of need following the cessation of the ESPN Bitcoin Bowl deal.
BitPay has pivoted away from Bitcoin merchant processing, an area that other companies such as CoinKite have been able to take a leaping gain in. Other companies in the space have been able to better leverage their other products, such as in the case of Coinbase, or even offer their own POS systems, as in the case of CoinKite. BitPay is still around though, and many large companies still process Bitcoin payments through BitPay. The money is still flowing, and it would be a net loss for the Bitcoin community if this old Bitcoin company were to go under from the pressure from this revelation. On the other hand, the community might lose faith in a company that makes mistakes such as this.
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Images from BitPay.