Bitcoin tumbles as hackers steal $65 million from Hong Kong exchange

The price of bitcoin has tumbled as one of the world's largest exchanges suspends trading after losing $65 million worth of the cryptocurrency in a massive security breach.

  30 3 comments

Bitcoin tumbles as hackers steal $65 million from Hong Kong exchange

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The value of bitcoin against the dollar plunged in the aftermath of the hacking attack at Hong Kong-based Bitfinex, leaving the cryptocurrency treading water at $540, way down from a $650 weekend high.

Bitfinex has replaced its home page with a security warning, informing users of its decision to halt trading while it investigates the breach. In total, the mysterious hackers made off with 119,756 bitcoin, leaving Bitfinex customers seriously out of pocket.

"We will look at various options to address customer losses later in the investigation," says the company in a statement. "While we are halting all operations at this time, we can confirm that the breach was limited to bitcoin wallets; the other digital tokens traded on Bitfinex are unaffected. We are deeply concerned about this issue and we are committing every resource to try to resolve it."

Sponsored [New Report] Managing Fraud Risks with Synthetic Data: A Practical Approach for Businesses Services Industry

Comments: (3)

A Finextra member 

Can a bitcoin expert please explain how these bitcoins get stolen. Wouldn't it require the hacker to take the access keys rather than the coins, and wouldn't it also require a miner to validate the transactions, so can we not point to the transactions on the blockchain and declare them as fraudulent, or is there no repudiation on the blockchain? Thanks  

A Finextra member 

A great use case for why banks should be seizing the opportunity around being an on-off ramp for crypto currency. We're actually good at managing this stuff.

Good summary of what's currently known here:

http://www.coindesk.com/bitfinex-bitcoin-hack-know-dont-know/

Russell Bell

Russell Bell Director at Fastbase Ltd

Not an expert but for what it's worth, the hacker stole private keys and used those keys to transfer USD65m worth of bitcoin elsewhere.  These transfer transactions would have been recorded on the blockchain, yes.  There is no repudiation on the Bitcoin blockchain, unlike Ethereum.  Nobody knows yet who was at fault (likely bitfinex or bitgo or both) or whether depositors will be refunded.

Moral of the story, and this should not be news to anybody: hold your funds yourself, don't leave it with an exchange for longer than necessary.  Unfortunately the learning curve for setting up a private wallet is still rather steep.

[Webinar] PREDICT 2025: The Future of AI in the USFinextra Promoted[Webinar] PREDICT 2025: The Future of AI in the US