Bitcoin Payment Processor EgoPay Suffers Blow Ego; Hacking

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Apparently EgoPay has had a nasty blow to its… ego.

After freezing funds and bringing its operations to a temporary halt last week, the company has confirmed that it has been the victim of a massive hack, and ultimately, an insider is suspected.

Back in December, Lithuania-based exchange GOLDUX.com made the claim that the company had indeed been the victim of a hacking, but EgoPay refused to support such a claim… Until now…

The company verified the hack in a recent blog post, and later went on to discuss the event further by saying:

“False values were made available in the merchants platform, when no actual value was transmitted in EgoPay.  This hacker then proceeded to convert this fake value into irreversible currencies all within a one-hour window.  These merchants believed that this value was in their EgoPay account, but unfortunately it was not.”

Naturally, EgoPay isn’t too happy about what has occurred, and is doing what it can to alleviate its customers anger and mistrust.  Company CEO Tadas Kasputis has stepped down, and EgoPay has issued a statement to all its users, explaining:

“Rightfully, people are upset at us.  We failed to communicate.  We failed our membership base.  We take full responsibility on this.”

Many are having mixed feelings about the situation.  On one hand, EgoPay now joins the ranks of companies such as Bitstamp, who have been victimized while working towards accomplishing one goal; to bring bitcoin more mainstream and allow for easier transactions, and for that you can’t help but feel a little sorry for them.  On the other hand, it has been well over a month, and EgoPay is only letting people know now.  Did they think saying something would cause a panic?  Why the delay?

What do you think of EgoPay’s decision to wait?  Do you support it, or are you against it?  Post your comments below.

Image from EgoPay and Flickr.