Bitcoin trader Bitfinex hacked, $68 million user funds stolen

Bitcoin trader Bitfinex has been forced to halt operations after its platform was breached by hackers and millions of user funds stolen. The US-based firm has also had to stop all digital token deposits to and withdrawals from its platform.

Bitfinex stated that it is investigating the breach to determine what happened, adding that some of its 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, will be taken down and the maintenance page will be left up,” the firm stated on its maintenance page.

Zane Tackett, Director of Community & Product Development at Bitfinex later confirmed the amount of funds lost on Reddit thus: “I can confirm that the loss from the hack stands at 119,756btc.”

This comes to US $68.7 million (as 1 bitcoin exchanges for US $574), an amount which the firm will now have to refund its users.

“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,” the firm stated.

The firm has assured the public and clients that it will keep posting updates as and when appropriate on its status page, adding that it is deeply concerned about the issue and are committing every resource to try to resolve it.

Bitfinex is currently billed as the largest dollar-based exchange for bitcoin globally. In mid last year, Bitfinex entered into a partnership with BitGo to enable it to offer individual multi-signature wallets for each customer. The collaboration allows customers to authenticate funds via the blockchain for transparency while retaining Bitfinex’s security capabilities.

“The trading community has long sought individually verifiable accounts without sacrificing security or performance. With the help of BitGo’s multi-signature technology, the Bitfinex team is very excited to be the first exchange in the world to automate Bitcoin settlements using ‘On-Blockchain’ customer segregated wallets,” Zane Tackett said while commenting on the partnership.

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