Hackers Steal Nearly $70M in Bitcoin

Tanmay S. Redhu

On Wednesday, Slovenia based cryptocurrency marketplace NiceHash reported that the contents of its bitcoin wallet had been stolen in a security breach. One executive said that nearly $64 million had been lost. NiceHash, which describes itself as the largest marketplace for mining digital currencies, announced on Wednesday that it was suspending its operations for at least 24 hours, because of the security breach. "While the full scope of what happened is not yet known, we recommend, as a precaution, that you change your online passwords", NiceHash had warned users.

Roughly 4,700 bitcoins were stolen from the site's account, CEO Marko Kobal said. They're worth roughly $75 million as of Friday afternoon in Asia.

Despite the widespread notion that the blockchain technology behind bitcoin and other cryptocurrencies is safer and more trustworthy than that underlying other kinds of digital financial transactions, startups in the industry have struggled to secure their sites and software against hackers. The cyber heist is yet another reminder about the vulnerability of some digital currency platforms. The theft comes as the price of Bitcoin continues to surge, dumbfounding experts and stoking concerns of a bubble.

NiceHash has notified all major bitcoin exchanges and mining sites about the breach in order to track and possibly recover the stolen currency. The hackers appear to have entered the NiceHash system using the credentials of one of the company's engineers. "Given the complexity and security of the systems in place, this appears as an incredibly coordinated and highly sophisticated attack," Kobal said. He didn't say whether funds had been taken from NiceHash users' accounts as well.

High-stakes attacks like these are not uncommon, with several large breaches and thefts hitting Bitcoin and other related services over the past year. Bitfinex, a Hong Kong-based bitcoin exchange, was briefly shut down last year after hackers stole nearly 120,000 bitcoins -- worth more than $65 million at the time. The year before, cyber thieves made off with about 19,000 bitcoins after breaking into European exchange Bitstamp. Cybersecurity firm FireEye warned recently that North Korean hackers are stepping up their attempts to steal bitcoin in order to support Kim Jong Un's authoritarian regime.

While not confirmed in any way to be related to the Bitcoin theft, information has surfaced on Reddit through user /u/YadaBadaDoo that NiceHash’s founder and CTO, Matjaz Skorjanc, is himself a convicted criminal, having been convicted in 2013 having created the Mariposa botnet, assisting others in “wrongdoings” and money laundering. Articles published on BBC and Phys.org confirm the Reddit user’s findings.

Interestingly, the attack had no impact on the value of Bitcoin. As cryptocurrency continues to rise in value, you can bet plenty of thieves and hackers are going to continue to steal what they can.