$65 Million in Bitcoins Stolen from Bitfinex

119,756 Bitcoins, or about $65 million at current exchange course, were stolen by hackers from the Bitcoin exchange Bitfinex in Hong Kong.

Although this is the latest cryptocurrency-related hack it is not the only one. In fact, only about a month and a half ago, a similar amount was stolen but in Ethereum’s currency Ether. The attack was carried out by exploiting a coding flaw in the contract system of The DAO. The Bitcoin breach is the second security compromise involving cryptocurrency in what is turning out to be a testing year.

Bitfinex represents about 50% of the BTC-USD pair exchange volume but, after the theft, the Bitcoin price decreased to around $500. Statistics show that later on is has risen up to $535 leaving it down 12% for the day.

Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex.” – Confirmed Bitfinex on its website – “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.

This is the second time Bitfinex has experienced a security hack like this as it was once again attacked in May last year. The crooks succeeded in compromising the hot wallet system for customer deposits managing to steal 1459 Bitcoins which at the time represented 0.5% of all customer deposits. After that Bitfinex started cooperating with BitGo providing each user with an individual multi signature wallet.

Despite the enormous amount of money stolen from Bitfinex it still has the second place on the biggest cryptocurrency thefts list. The first one is for Mt.Gox which, in 2014, suffered a loss of the record-worthy amount of 850K Bitcoins. This hack occurred through a technical term known as transaction malleability where the exchange was duped into re-sending withdrawals which were changed before being submitted to the network for validation.

In 2015 another attack, this time against Bitstamp, was carried out successfully allowing the criminals to steal 19,000 BTC which represented 12% of its total BTC deposits at the exchange. The crooks somehow managed to use a sophisticated malware against some of the employees which gave them access to the Bitstamp hot wallet funds` servers.

It is, without a doubt, going to be a testing year for cryptocurrency security. Ethereum implemented a hard fork after the loss of $60 million. Shapeshift lost over $230,000 due to an angry former employee with an access to the internal systems. 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.

Bitfinex volume on the BTC-USD Pair is usually around 30-60K BTC per day. Today the trailing 24 hour volume is over 150K BTC.

CryproCompare states that market shares are already changing. For now Bitstamp has the dominant position with 14% market share closely followed by Coinbase and BTCe each with 13% of market share.

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