Bitcoins With $72 Million Value Stolen from Bitfinex Exchange

Close to 120,000 units of Bitcoin, the digital currency worth nearly $72 million was stolen from Bitfinex an exchange platform in Hong Kong. This rattled the global community of bitcoin in the second largest ever security breach of that type of exchange.

Bitfinex is the largest exchange in the world that is dollar based for bitcoin. It is known for possessing deep liquidity in the digital currency community for the U.S. dollar and bitcoin currency pair.

Zane Tacket, the Bitfinex Community and Product Development Director said on Wednesday that the number of bitcoin stolen was 119.756 from different accounts of users and the exchange had yet to decide how it would be addressing the losses of its customers.

The bitcoin was taken from the segregated wallets of users said Tacket.

The company announced that it had reported the bitcoin theft to local law enforcement and was cooperating with top line blockchain companies in an attempt to track the stolen cyber-currency coins.

In 2015, Bitfinex announced it entered into an agreement with BitGo, based in Palo Alto, California. BitGo uses a security technique of multiple signatures to store the deposits online of users, which allows for speedy withdrawals.

BitGo in a tweet this week said that its internal investigation found no evidence that any BitGo servers had been breached.

The breach of security comes just two months after the exchange in Hong Kong had been ordered to pay a fine of $75,000 by the United States Commodity and Futures Trading Commission for offering illegal financed transaction that were off-exchanged in bitcoin as well as other digital currencies.

The breach on Tuesday triggered a drop in the prices of bitcoin and is reminiscent of the events which led up to the collapse in 2014 of Mt Gox, the exchange based in Tokyo which said it lost close to $500 million in bitcoins of its customers in a hack.

Bitcoin on Tuesday plummeted close to 23% following the news of the hack. On Wednesday in Hong Kong, Bitcoin was up by 1% to just over $545.19.

Tackett said that the security breach had not exposed weaknesses in blockchain security, which is technology that processes and generates bitcoin, a cryptocurrency that is web-based that can move around the world anonymously without the need for any central authority.

An expert in bitcoin said this scandal highlights the risk businesses have using cryptocurrency on their ledgers.

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