15 Jun 2011

Possible theft draws more attention to online currency Bitcoins

About $500,000 worth of Bitcoins, an online currency, might have been stolen from a user's wallet file on June 13.

The self-described victim announced in a Bitcoin forum post that 25,000 Bitcoins had been taken from his or her wallet by a hacker.

Bitcoins are a currency shared via a peer-to-peer network that allows for anonymous online transactions without the need for a third-party facilitator such as a bank or PayPal. Though few vendors accept the currency, it has gained enough traction among drug dealers that Senators Charles Schumer of New York and Joe Manchin of West Virginia recently sent a letter characterizing it as an online security threat to the heads of the U.S. Justice Department and the DEA.

The Wall Street Journal SmartMoney website linked this increased attention to a skyrocketing exchange rate for the online currency, which reached a value of over $30 to the Bitcoin on June 8. As of June 15, this had fallen to about $19.63 per Bitcoin, according to Bitcoinwatch.com.

Because the currency is not overseen by any central body, it could prove as impossible for the U.S. government to regulate the Bitcoin market as it will be for the victimized user to recover the stolen money.