BITCOIN BITES

One of the world’s largest bitcoin exchanges lost $65 million in a hack

Obsession
Future of Finance
Obsession
Future of Finance

In another blow to bitcoin, one of the world’s biggest exchanges of the cryptocurrency suffered a massive security breach.

Bitfinex, a bitcoin exchange registered in Hong Kong announced Tuesday (Aug. 2) it had suffered a security breach that has forced the company to halt all trading indefinitely. The company had yet to identify the cause of the breach, but said it would work with law enforcement and take down its site as an investigation ensues:

We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up.

The theft is being reported to—and we are co-operating with—law enforcement.

The company confirmed to Quartz that a total of 119,756 bitcoin had been stolen by hackers, amounting to $65 million in current prices. It declined to state which specific authorities it was working with to determine the cause of the breach. Despite being registered in Hong Kong, the company’s employees are distributed around the world.

Bitfinex is the third-largest bitcoin exchange in the world, and by far the largest for transactions conducted in US dollars.

The heist marks the latest in a series of cryptocurrency exchange hacks that have left companies bankrupt and caused panic in bitcoin markets. The DAO, an autonomous venture capital firm built on Ethereum and run by computer code, raised $220 million from individuals but was hacked for $79 million. Ethereum is still trying to pick up the pieces from the hack. Bitstamp, another bitcoin exchange, was reportedly hacked for $5 million in early July, according to Coindesk.

In 2014 Tokyo-based bitcoin exchange Mt. Gox lost $460 million due to hacker thefts.

Bitcoin has plummeted as a result. After news of the hack broke at 18:00 UTC on August 2, prices for the cryptocurrency dropped 14%, from $602.78 to $517.05, according to data Coindesk’s Bitcoin Price Index. It has since recovered slightly, climbing back up to $541.76.

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