Firm has started “ongoing conversation with the police”.
The hosting site, Code Spaces, has ceased trading after a hacker gained access to its Amazon Web Services control panel and deleted most its data.
It had been suffering from denial of service attacks since the beginning of the week, with the hacker looking to extort money from the company.
Code Spaces said: "An unauthorised person, who at this point who is still unknown, had gained access to our Amazon EC2 control panel and had left a number of messages for us to contact them using a hotmail address."
The company began to investigate the cause of the breach, as well as the extent of it, leading them to the conclusion that the hacker had not gained machine access at the time, and was not from inside the company.
"At this point we took action to take control back of our panel by changing passwords, however the intruder had prepared for this and had already created a number of backup logins to the panel," Code Spaces added.
"Upon seeing us make the attempted recovery of the account he locked us down to a non-admin user and proceeded to randomly delete artefacts from the panel."
Code Spaces was able to gain back access to their panel, but found that the hacker had removed machine instances, backups and partitions.
Amazon was unable to help with the problem, but Code Spaces has begun an "ongoing conversation with the police". It has also set up a support team to start processing refunds.
"It’s a terrible position to be in, we have served this community for seven years but we let everyone down in one night," it said.