Bitcoin lost wallet.dat

Today Bitomat, Poland-based third largest Bitcoin exchange, announced that as of July 26 they lost access to their wallet.dat file and thus the exchange’s entire fund base has become inaccessible. The Bitomat service is now up for sale for 17, 000 Bitcoins to help recover the cost of the missing coins and return them to their owners. At a current conservative market estimate of near $13 per BTC that would put the sale price of the exchange as exceeding $221k.

According to the statement published by Bitomat, it appears that they were using Amazon Web Service’s Elastic Cloud Computing network and held all of their information, including the wallet file for the exchanges bitcoins in a virtual machine. Here’s a portion of an unofficial translation of the statement,

On 26 July 2011 at about 11:00 PM, I noticed that bitcoin server was out of resources and I had to increase RAM. As a result of this operation, the virtual machine was deleted and all data lost, including bitcoin wallet and its backups.

I have established that data was lost because settings of the virtual machine were changed, although I didn’t change them myself. Amazon Web Services Company, which hosts our servers, says that the cleared machine has been set up to be irretrievably destroyed (including the data on the disks) at the shutdown.

I’m still trying to establish who has changed the settings and whether I will be able to recover the lost data. Unfortunately cooperation with Amazon Web Services is very difficult. As soon as I realized that my virtual machine was lost I have ordered AWS premium support, talked to the manager and asked for securing of the disk data. So far, without success.

As most reporting on Bitomat’s losses are in German or Polish currently, it’s hard to get a clear picture of exactly what happened. However, from the translation above it’s apparent that they were using Amazon Web Services Elastic Cloud Computing to host virtual machines and that the instances that ran their exchange had been reset.

AWS contain numerous warnings to users that the virtual machines running in the EC2 cloud make use of ephemeral instances; meaning that if an instance is taken offline all the data stored within can be lost permanently. Taken from the statement, it appears that Bitomat happened to be storing backups and current state of their wallet in an EC2 virtual machine so it’s possible that they have little change of recovering the old funds from the wallet.