Bitcoin ATM company sues cybersecurity unit over $400K crypto hack

This is a cute image of a Bitcoin ATM, after an operator had crypto stolen directly out of its wallet.

One of the largest Bitcoin ATM operators is suing a cybersecurity provider after hackers stole 11.3 BTC ($411,000) via its machines, reports Law360.

Chicago-based Bitcoin of America (BOA) says the breach could’ve easily been avoided. Their Bitcoin wallet was hacked four times this year alone.

BOA’s lawsuit claims The Silver Logic (TSL) is in breach of contract after failing to set basic protection measures, such as firewalls and whitelists (the latter restricts access to Bitcoin wallets to pre-approved IP addresses).

BOA operates more than 1,200 Bitcoin ATMs in the US. It claims to be the third-largest operator in the world.

The Silver Logic’s website claims to have done a lot more than security measures for an unnamed client.

“Had [The Silver Logic] timely implemented this widely diffused security strategy and performed its services ‘in accordance with recognized industry standards’ as it had agreed to, [it] would have easily prevented the hacking of BOA’s Bitcoin wallet,” the lawsuit states.

When BOA alerted TSL of the missing Bitcoin, TSL said only then was whitelisting implemented.

Bitcoin ATMs are common targets

An old joke in Bitcoin goes that would-be ATM burglars would be left stumped, as crypto is entirely digital.

Indeed, it might seem counter-intuitive, but thefts from Bitcoin ATMs are quite common.

Many Bitcoin ATMs sell cryptocurrency for fiat cash, which leaves those machines vulnerable to break-ins just like any other.

Still, the most high-profile case was considerably more hi-tech. In 2018, a team of four went on a 10-day double-spending spree across Canada, stealing 23 BTC from HoneyBadger brand Bitcoin ATMs.