Bitcoin’s price plummets as 125k Bitcoins may have been stolen from Bitfinex
Bitcoin’s price crashed today as bitfinex dramatically announced a “security breach” that led to the theft of an unconfirmed number of bitcoins. The biggest USD bitcoin exchange further announced a shutting down of its website and trading in ominous signs reminiscent of MT Gox.
We are awaiting confirmation, but circulating rumors are suggesting that an incredible 125,000 bitcoins, valued at almost $100 million, may have been hacked. The evidence provided is days destroyed. Around mid-day today, there was a dramatic dip.
If the suggested evidence is correct, this would be the largest theft in bitcoin’s space since MT Gox. We have been unable to confirm any detail as we have received no response. It is not, therefore, known how the hack may have occurred, especially on such a scale, or if the rumors and the little evidence we have are correct, considering bitfinex’s assumed use of cold wallets. Moreover, from our understanding, they use a two of three multisig, with one key held by Bitgo. It is not, therefore, at all clear how such a staggering amount may have been stolen.
Bitfinex has, however, been experiencing numerous problems over the past few months, leading to an unexpected freezing of trading on at least two occasions, both of which caused a crash in bitcoin’s price by almost $100 in each instance. The official statement at the time was that there were some problems with their data servers, and they were working hard to resolve them, but no post-mortem investigative report was published as far as we are aware.
Bitfinex was fined by CFTC $75,000 “for offering illegal off-exchange financed retail commodity transactions and failing to register as a futures commission merchant,” in early June, but Zane Tackett, Director of Community and Product Development at Bitfinex, strongly denied any connection between previous outages and CFTC’s fine.
We’re likely to hear much more detail on this deeply shocking latest announcement from Bitfinex in the coming days and perhaps months, especially if the staggering amount is correct. For now, we urge caution as the story is evolving.
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.
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.
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. 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. 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.
coins weren’t physically stolen..and this is the problem with e-money..
this caused a large drop in the bitcoin value..as you would expect..