NewsMajor Bitcoin Exchange Breach; Coin Values Tumble

Major Bitcoin Exchange Breach; Coin Values Tumble


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Major Bitcoin Exchange Breach; Coin Values Tumble

Bitfinex, one of the largest institutional-level bitcoin exchanges by US dollar trading volume, today shuttered all trading as it looks into an attack carried out against its platform.

How bad is the attack? How much was lost? Well, no one knows yet, but based on a terse update posted to the Bitfinex blog, it sounds bad:

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.

We are investigating the breach to determine what happened, but we know that some of our 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 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.

Bitcoin prices tumbled in the wake of the news, with one Bitcoin trading as low as $586.24 minutes ago. Other major crypto assets are down across the board.

It will be interesting to see, however, if some of the other crypto assets gain against Bitcoin as more details emerge: after all, Bitfinex says only bitcoin balances were successfully depleted by the attacker. This means that markets may be anticipating a malicious “dump out” of the stolen Bitfinex coins on another exchange, at some point. And that anticipation may be what is driving prices lower.

New to Bitcoin and Ether? Learn more about getting started with cryptocurrency in the tutorial video below:

Not financial advice. No warranties or guarantees provided. At time of publication, I hold some bitcoin, ether, US dollars, and gold.

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