Attack on Dogecoin vault prompts shutdown, panic

Users of Doge Vault, a popular online wallet for holders of the memetastic currency Dogecoin, feared the worst after the service shut down without warning on Monday.

And it turns out the speculation was true.

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Doge Vault confirmed today that the service was compromised Sunday and that the attack tampered with people’s wallet funds, according to an announcement on the website’s homepage. The site halted transactions as soon as Asad Haider, the creator of Doge Vault, learned about the attack, but all data hosted on the site’s infrastructure was destroyed.

Haider is currently investigating the extent of the attack, which includes possible damage to individual wallets. Although Haider hasn’t commented on funds lost, the Dogecoin community speculates that he lost roughly 121.6 million Dogecoin (around $55,000) based on this transaction record.

Haider hopes to determine how the attack occurred so that he can improve the service’s security when Doge Vault reopens. He also warned users not to transfer funds to Doge Vault wallets until further notice and said that he plans to update the community on the site’s findings and course of action in the next 24 hours to 48 hours.

Dogecoin, introduced on Dec. 8, has a small but growing and vocal community. In January, the Jamaican bobsled team received more than $25,000 in the cryptocurrency, allowing them to attend the Winter Olympics in Sochi.

As many Bitcoin users learned after the Mt. Gox debacle, hot wallets aren’t the most secure method of storing cryptocurrency. Putting Dogecoin in an online wallet is like walking around with cash; it’s easier to make transactions, but there’s a greater risk of having your money stolen. In other words, don’t put tons of Dogecoin online, and use a local wallet for large amounts.