Published: Sat, August 06, 2016
Economy | By Melissa Porter

Bitfinex says following hack, it will disable trading on exchange

Bitfinex says following hack, it will disable trading on exchange

A single bitcoin dropped down from $650 to $480 just after the hack.

Bitcoin late on Tuesday was down 6.35 percent at $567.83 on the BitStamp platform.

One of the world's largest Bitcoin exchanges, Hong Kong-based Bitfinex has been hacked, losing as many as 120 000 Bitcoin units with a value of about $65-million.

"Some of our users have had their bitcoins stolen", Zane Tackett, Bitfinex's director of community and product development, said on Reddit.

Bitfinex is one of the largest exchanges for bitcoin, and is known in the digital currency community for having a platform that has deep liquidity in the United States dollar/bitcoin currency pair.

Bitfinex closed its trading platform on Tuesday after revealing that it had lost 119,756 BTC, an amount worth roughly $69.5m at current prices.

The company said that the theft was from individual user accounts and that it was cooperating with law enforcement while looking at ways to "address customer losses".

"We ask for the community's patience as we unravel the causes and consequences of this breach".

It added USA dollar deposits were not affected. In 2014, investor confidence in bitcoin also was dented with another larger cybersecurity breach, at Japanese exchange Mt. Gox. In both cases bitcoin price dropped by nearly $100.

Almost 120,000 units have been pilfered making it the second-biggest security breach ever of such an exchange.

Trader Jacob Eliosoff told Coindesk that the longer-term impact of the hack could depend on how Bitfinex "will make customers whole". In a tweet, BitGo said it found no evidence of breach of any BitGo servers in its investigation.

The things about this security breach are still unclear, but the attackers seem to have bypassed the Bitfinex's directed limits on the withdrawals.

The company said its main website would remain offline and all trading halted until the investigation was over.

"Bitfinex is in lockdown/investigation mode, so we're not going to know anything for sure for a few days", Peter Todd, an active bitcoin code contributor based in Toronto, wrote in an e-mail.

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