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120,000 Bitcoin Stolen in Bitfinex Breach

Bitfinex hacked

Bitfinex hacked

Hong Kong-based Bitfinex, one of the world’s largest digital currency exchanges, suspended deposits and withdrawals on Tuesday after discovering a security breach that resulted in a large amount of Bitcoin getting stolen. The incident led to a significant drop in the value of Bitcoin.

Bitfinex launched an investigation and reported the breach to law enforcement. The investigation so far revealed that 119,756 Bitcoin have been stolen from customers’ wallets. The exchange platform believes other currencies are not impacted.

The stolen Bitcoin units were worth roughly $72 million before the breach was discovered, but the value of the cryptocurrency dropped by more than 20 percent following the incident.

“As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach. Any settlements will be at the current market prices as of 18:00 UTC,” Bitfinex said in a statement. “We are taking this necessary accounting step to normalize account balances with the objective of resuming operations. We will look at various options to address customer losses later in the investigation.”

No information has been provided on how the security breach occurred. Bitfinex uses the services of BitGo, which specializes in Bitcoin and blockchain security, but BitGo says there is no evidence of a breach on its own servers.

Bitfinex representative Zane Tackett explained on Reddit that the platform uses several security mechanisms, but the attackers somehow managed to bypass them. The company also has limits in place to prevent hackers from draining wallets, but those limits were circumvented as well.

Tackett noted that the company is “quite positive with a high degree of certainty that it was not an inside job.”

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Several Bitcoin exchanges suffered security breaches over the past months, and some were forced to shut down their operations as a result. The list of companies targeted by malicious actors includes CAVIRTEX, Bitstamp, Bter, Getacoin and ShapeShift.

Last month, the value of the Ethereum digital currency plummeted after someone hacked the Decentralized Autonomous Organization (DAO), the single largest holder of Ethereum.

Written By

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.

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