The value of bitcoins plummeted 20 percent after nearly 120,000 units of the digital currency were stolen from a Hong Kong exchange. Back in 2014, MtGox, then the largest exchange, collapsed after 0 million in bitcoin was stolen by apparent hackers. The attack knocked the price of a single bitcoin from $604 to $482 – its lowest in two months – although the cryptocurrency recovered to $544 as of yesterday and was hovering at about the value same at the time of publishing.
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Hackers have compromised the Bitcoin exchange Bitfinex, the company announced today, withdrawing roughly $61 million from various consumer accounts. The 120,000 bitcoin account for around 0.75% of all bitcoin in circulation. The Hong Kong-based Gatecoin, which was hacked in May, lost around $2 million (250 Bitcoin and 185K Ether) after the crook managed to go around the exchange’s control limits. This method of maintaining segregated wallets for each user on the exchange also means that users can keep tabs on their wallet balance at all times, which is how some Bitfinex users have been able to see that funds have been removed from their wallets.
To get a sense of how large an exchange this was, data on transactions using the exchange during the 30 days prior to the heist revealed that 600,000 bitcoins were traded.
“The CFTC has engaged in a productive, open, and timely dialogue with us, and, as a result, we believe we have a better understanding of the regulatory framework governing financed trading on our platform”. The exchange released a statement saying investigations were underway to determine how the breach happened and how many users were affected by it. As recently as January 2016, bitcoin was trading at just over $200 – less than a third of its $740-odd June 2016 highs. The company has said bitfinex.com will remain offline while it conducts its initial investigation and secures its environment, and said updates will be posted when appropriate.
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Bitfinex added that it was working with law enforcement to investigate the theft and planned to resume operations despite the hack. After that Bitfinex started cooperating with BitGo providing each user with an individual multi signature wallet. Any settlements will be at the current market price as of 18:00 UTC (1800 GMT), the company said.
