"Direct" means without any intervening step i.e. The Policy requires that the loss of money be the direct result of the use of any computer to fraudulently cause a transfer of that property from inside the premises to a person or place outside the premises. She replied that she did not send the prior email and that Second Market did not purchase the 3,000 bitcoins.īitPay claimed that when the attacker “illegally hacked” Krohn’s computer to send authorizations, “it is this hacking which fraudulently caused the transfers of bitcoin and therefore the loss to Bitpay of bitcoin valued at $1,850,000.”Īccording to court documents, the insurance company refused to pay and claimed: The CEO sent an email to Krohn to check the validity of the request since it exceeded “the usual 1,000-2,000 bitcoin amount between the companies.” After the attacker, again posing as Krohn, replied that the request was valid, the CEO transferred the 3,000 bitcoins.īut this time the CEO carbon copied a Second Market employee when he sent an email confirming the bitcoins had been sent. Two hours later, another email allegedly from Krohn, asked the CEO to transfer another $1,000 from BitPay’s hot wallet to the same wallet address allegedly belonging to Second Market.Īpparently that worked so well for the attacker that he tried it again the next day another email supposedly from Krohn asked the CEO to send 3,000 bitcoins to Second Market at a different blockchain wallet address. Yet Krohn received an error message after entering his credentials he did not know the link led “to a website controlled by the hacker.”Īfter gaining control of the CFO’s corporate email, the attacker allegedly studied Krohn’s emails to discover how BitPay conducted business, “including the fact that Second Market was the sole purchaser of bitcoins with whom BitPay did not require advance payment.” Later that day, the hacker – using Krohn’s email – sent an email to BitPay CEO Stephen Pair that email, which appeared to contain a purported email chain between Krohn and Second Market, asked the CEO to transfer 1,000 bitcoins to a specific wallet.
#Bitpay news password#
One court document ( pdf) says after he opened his Google Docs account, his Google account password and authentication codes were compromised, while another ( pdf) says Krohn provided the credentials for his BitPay corporate email account. Krohn clicked the link and entered his credentials. The email asked Krohn to review the negotiation modifications on the attached Google document. The hacker, posing as Bailey, sent an email to BitPay's CFO Bryan Krohn. Bailey had been in negotiations with BitPay about buying BitPay’s magazine yBitcoin. To a place outside those “premises.Īccording to court documents obtained by the Atlanta Business Chronicle, BTC Media CEO David Bailey’s computer had been hacked at some point and his email compromised.
To a person (other than a “messenger”) outside those “premises” or b. We will pay for loss of or damage to “money,” “securities” and “other property” resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the “premises” or “banking premises”: a. The policy, which supposedly covered BitPay for a million dollars, stated ( pdf):
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