Bitcash

On November 11, 2011, Bitcash.cz, a Czech Republic-based Bitcoin exchange, suffered a devastating hack that compromised up to 4,000 customer wallets. Founded in July 2011, Bitcash.cz provided wallet services, an online exchange, and an OTC trading platform, establishing itself as a key player in the early cryptocurrency ecosystem. The attack, likely executed through a phishing scheme, saw hackers send fraudulent emails posing as Bitcash.cz staff, though user Aleš Janda expressed skepticism about these claims. Janda’s blockchain analysis traced 485 BTC, worth approximately $100,000 (over 2 million Czech koruna), to a fraudulent charity site mimicking a legitimate Bitcoin donation page for WikiLeaks, suggesting a compromise of the exchange’s web interface rather than private keys.

The breach forced Bitcash.cz offline, displaying only a hack notification, and shattered trust in the platform, highlighting vulnerabilities in early exchanges. No funds were recovered, and the site’s owner, “Carlos,” reportedly filed charges against an unknown perpetrator, but the unregulated 2011 landscape limited recourse. The incident exposed critical security flaws, particularly in web interface protections, prompting the cryptocurrency community to demand stronger safeguards. It remains a cautionary tale of phishing risks and the need for robust security in nascent digital markets.