Digital currency start-up BitPay has been valued at US$160m following a Series A funding round that has raised $30m for its future development, but simultaneously the Doge Vault site where many people store holdings of the Dogecoin crypto-currency has been raided with potential losses of 121m virtual coins, worth $56,000, being reported.
The Doge Vault crypto-currency repository released a statement https://www.dogevault.com/ at the start of the week admitting a large data loss event had occurred and that it had detected hackers tampering with wallet funds before the site was shut down as a precautionary measure.
Some Doge Vault users on social media said large amounts of Dogecoins were moved off the site just before the lock down, with many last minute transfers of the crypto-currency being traced to one wallet that now holds 121m virtual coins.
“As soon as the administrator of Doge Vault was alerted, the service was halted,” said the online statement dated 11 May. “The attackers had already accessed and destroyed all data on the hosted virtual machines and we are currently in the process of identifying the extent of the attack and impact on user’s funds.”
The attack apes the earlier hack versus the Mt Gox trading exchange where millions of dollars’ worth of Bitcoins were previously stored, and calls into question the whole future of crypto-currencies such as these, which some smaller corporates and tech companies have tentatively begun to accept as a valid virtual payment method.
Despite these concerns the BitPay digital start-up raised $30m from Index Ventures, with additional funding from Horizons Ventures, Founders Fund, Felicis Ventures, RRE Ventures, TTV Capital and other venture capital firms, adding to the $2.7m raised last year when it launched. Sir Richard Branson is also understood to be among the investors, no doubt as a way to further publicise his Virgin Galactic space travel company, which accepts Bitcoins stored on BitPay and other such platforms.
BitPay currently processes $1m per day in Bitcoin payments from over 30,000 merchants, 50% of whom are in the US, with 30% in Europe and 20% across the rest of the world. WordPress, TigerDirect and Shopify are understood to be among its customers.
The firm will use its additional funds to expand globally and add 70 software developer jobs, spread around its Atlanta, San Francisco, Buenos Aires, and Amsterdam offices. New iterations of BitPay’s core merchant acquiring products and accounting and tax reporting software can also be expected to result from the injection of capital.
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