Bitcoin in free-fall after hackers steal $65 mn of the digital currency
03 Aug 2016
Cryptocurrency Bitcoin fell sharply after one of largest exchanges halted trading because hackers stole about $65 million of the digital currency.
Bitcoin dropped 5.5 per cent against the dollar in Tokyo today, bringing its two-day drop to 13 per cent.
Prices were also down 6.2 per cent on Monday, although it was unclear whether the fall was related to the hack.
Hong Kong-based exchange Bitfinex said yesterday, trading, withdrawals and deposits were halted after the security breach was discovered.
The exchange added it was still investigating details and cooperating with law enforcement, but acknowledged some bitcoins were stolen from its users.
''Yes - it is a large breach,'' Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform, wrote in an e-mail.
''Bitfinex is a large exchange, so it is a significant short term event, although Bitcoin has shown its resiliency to these sorts of events in the past.''
Bitfinex confirmed in a message to Bloomberg News yesterday that hackers took 119,756 bitcoins worth about $65 million at current prices. While trading was suspended in all digital currencies, including ethereum, according to the exchange, losses were limited only to bitcoins.
It added US dollar deposits were not affected.
''We will look at various options to address customer losses later in the investigation,'' Bitfinex wrote in a blog post. ''We ask for the community's patience as we unravel the causes and consequences of this breach.''
The company's head of community and product development, Zane Tackett, who answered questions on Reddit's Bitcoin community forum, stated that 119,756 bitcoin were lost.
Tackett further stated "there was nothing users could have done" to prevent having their digital money stolen.
Tackett added that Bifinex was not using "cold" bitcoin wallets on the site - offline servers storing bitcoins - that could be used to retrieve reserves.
With all wallets online, the company had to halt the service to stop further breaches.
Shocked investors pushed down bitcoin prices, which tumbled nearly 20 per cent within the day after the announcement was made.
