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Bitcoin plunges as $65m of the currency disappears in a major hack

The volatile cryptocurrency lost more than 20% of its value after the breach.

Image: Zach Copley/Flickr

A MAJOR HONG Kong-based Bitcoin exchange has suspended trading after $65 million in the virtual unit was reportedly stolen by hackers – sending the digital currency plunging more than 20%.

Bitfinex said it had suspended all transactions after discovering that some users’ Bitcoin had been taken.

“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,” the company said in a statement posted on its website late yesterday.

“We are investigating the breach to determine what happened … we will look at various options to address customer losses later in the investigation,” it said.

Bloomberg News reported hackers took 119,756 Bitcoin, or about $65 million (€58 million) at current prices, from the platform.

“Yes, it is a large breach,” said Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform.

2907354 Source: AP Photo/Mark Lennihan

Rollercoaster ride

The breach is the latest blow to digital currencies after the New York Times reported in June that hackers diverted more than $50 million from an experimental fund of another platform that trades Ether, a similar unit to Bitcoin.

But the biggest case was in 2014, when the Tokyo-based Mt Gox trading exchange, then the largest in the world, declared bankruptcy when hundreds of millions of dollars in Bitcoin vanished or were stolen.

The company admitted 850,000 coins – worth around $480 million at the time – had disappeared from its digital vaults.

The collapse left a trail of angry investors calling for answers and denting the virtual currency’s reputation.

Its former CEO Mark Karpeles is facing allegations that he fraudulently manipulated data and pocketed the cash. His lawyers said last month he had been released on bail in Japan a year after his arrest on embezzlement charges.

In the wake of the scandal, Japanese lawmakers passed a bill stipulating that all “virtual currency” exchanges must be regulated by the country’s Financial Services Agency.

2907355 Source: XE.com

The Bitcoin story

Bitcoin are generated by complex chains of interactions among a huge network of computers around the planet and are not backed by any government or central bank.

Bitcoin was launched in 2009 as a bit of software written under the Japanese-sounding name Satoshi Nakamoto.

Earlier this year Australian entrepreneur Craig Wright claimed that he was the creator, but some have raised doubts over his claim.

Other digital currencies followed the launch of Bitcoin, but it was by far the most popular.

In 2013 Bitcoin’s value peaked at more than $1,200 – almost as much as an ounce of gold. But it has never reached those heights again, its value rising and falling regularly.

Written by AFP and posted on Fora.ie

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