Bitcoin cloud mining has been in a state of flux over the past six months. For the most part, this situation stems forth from the Bitcoin price that is far below the target to make cloud mining even remotely profitable. That being said, several cloud mining operators decided to remain in business, in the hopes of seeing a price increase in the near future. And for some companies altcoins seemed to be the Holy Grail of cloud mining for now.
Scrypt.cc – Altcoin Cloud Mining
With Bitcoin cloud mining being far from profitable these days, many individuals and companies started exploring the option of mining alternative digital currencies. Even though these altcoins have to be exchanged to Bitcoin before they can be converted to fiat currency, there are some options left to run a profitable cloud mining operation.
Scrypt.cc is one of the longest running altcoin cloud mining platforms in existence today. As has been the case with the Bitcoin cloud mining scene, in the world of altcoins, many companies have come and gone over the past 12 months. And not all of those companies had honorable intentions either.
Which brings us to a critical point of controversy as far as cloud mining, in general, is concerned. Most cloud mining companies will, unfortunately, turn into a Ponzi scheme sooner or later. The reason for this is simple: they claim to offer a certain amount of mining power, requiring customers to invest in a contract upfront. By only paying out a fraction of that amount on a daily basis, they can keep the service running for extended periods of time while attracting new customers at the same time.
That being said, there are various legitimate cloud mining operations in existence as well, of which Scrypt.cc appears to be one. And those services may sooner or later attract unwanted attention. Scrypt.cc was no exception to that unwritten rule, unfortunately, as their platform was breached last night, and nearly 1,000 BTC stolen.
Database Breach To Empty Hot Wallet
Scrypt.cc posted a message on their website a few hours ago, explaining the situation as it happened. Quite a large amount of Bitcoin has been stolen – 871 BTC according to the information we have received – and an undisclosed amount of cloud mining hash power has been credited to the hacker’s account as well.
“Around 14 hours ago our database was breached, the hacker credited himself BTC and KHS and withdrew BTC until our withdraw wallet was empty. He then proceeded to make suspicious orders in the market in which the market automatically turned itself off. This sent an alert to me and other support staff, one of them seeing what was happening but not being able to do much as he does not have back-end access, he enabled our “Panic” mode in which put the whole site on lockdown. But the hackers still managed to gain access and steal the coins from the hot wallet and the backup withdraw wallet.”
It is important to note that most of the BTC stolen belong to Scrypt.CC, and are not customer funds. Just a few days prior to this breach, Scrypt.cc management – allegedly – moved a vast sum of 3,500 BTC to cold storage. If this had not happened, the total amount of coins being stolen would be much higher.
Until this matter is resolved, all Scrypt.cc customers are advised to not make any further deposits to existing wallet addresses.
Images courtesy of Scrypt.cc Shutterstock