Bitcoin Exchange Bitfinex Hacked. Bitcoins Stolen

Bitcoin exchange and lending platform Bitfinex has been hacked and reports say up to $70-72 million worth of Bitcoin was stolen.

Their own reporting of it is in a post on their blog right here.

Any attempt to login to the platform shows this message regardless of if you have any BTC there or not:

Bitfinex Security Breach Notice
Bitfinex Security Breach Notice

I happen to not have any BTC there at the moment although I do have USD there. My dollars are there although I have no open loan positions.

Updated Status

Updates are given at their Status Page here.

Bitcoin's price has gone down during this action from almost $650 each to $541 each as of this morning.

Current Reporting

Here is what the reporting is telling us so far.

Coindesk is one of the leaders in reporting this story and has confirmed with Bitfinex executives that just under 120,000 Bitcoins have been stolen. At its current price of $540 per this is a value of just under $65 million. The price of Bitcoin is down between 20-30% since the hack/theft was announced.

The BBC is reporting that Yahoo, who does little to no Bitcoin related reporting, is investigating a mega hack and data breach that some think may be related to this theft. MySpace and LinkedIn are reporting breaches where info on 200 million Yahoo accounts are being posted there and some placed for sale for Bitcoin. This ransom of BTC is why some are looking to see if the hacks are related to each other.

TechCrunch's coverage is here and additionally confirming the other stories as well as its use of Bitgo as its primary multi-signature wallet.

A multi-signature wallet is a pretty cool concept where (for example) there are 3 keys and as long as 2 are used to approve a transaction and move funds then the funds move. It's based on a technology called P2SH or Pays To Script Hash.

According to the Reddit for P2SH.info, there is confirmed movement of the funds out of the BFX multi sig wallets. Attempts to see if Bitgo's multi-sig technology was breached as well are inconclusive so far although the funds have been moved out. This likely means that private keys were stolen although I'm no expert on the cryptography.

Who is Affected?

It may sound stupid to say that everyone is affected except that while the Bitcoins were stolen, there are accounts there in USD and Litecoin too.

Not just crypto deposits and withdrawals are not available at this time but all deposits and withdrawals are not available currently.

What if I had a margin position/trade on at the time of the hack?

Some of you may have had trades going on when this hack took place. According to BFX, "...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."

So for now you need to check the Status Page but there is not much else you can do, for now.

Everyone is playing the wait and see game to see how the breach happened and if the coin is recoverable or not. We will keep you posted.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

2 thoughts on “Bitcoin Exchange Bitfinex Hacked. Bitcoins Stolen

Leave a Comment