Bitcoin wallet service suspended following security incident

Bitcoin wallet service provider Instawallet has suspended operations indefinitely following a security breach, in another instance which highlights the importance of stringent vulnerability management procedures.

In a statement published to the organisation's website, Instawallet confirmed that its database had been "fraudulently accessed" and that it was currently "impossible" to reopen the service.

"The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture," reads the statement.

"In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption."

Bitcoin (BTC) is essentially a digitised currency which is exchanged online through either computers or locally through smartphone devices.

Whilst not officially recognised as a currency, the estimated total value of bitcoin has been placed at more than US$1 billion.

The nature of bitcoin transactions – in terms of being anonymous and irreversible – has made this currency a hot target for cyber criminals in recent months.

Instawallet has promised to automatically refund any Instawallets with a balance of less than 50 BTC. At the time of writing, that amounts to around AUS$5,640, however because bitcoin values fluctuate rapidly, this number is likely to change significantly in the near future.

Any Instawallet users with balances over 50 BTC will be required to file a claim in order to have the value of that currency refunded, with individual claims "processed on a case by case and best efforts basis".

This is one example of how the evolving nature of technology is frequently creating new targets and security threats for both organisations and individual consumers alike.

Any Australian business concerned about its current level of cyber security may benefit from undergoing regular security audit evaluations. These can determine whether any vulnerabilities are present which may put your organisation at risk.

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