119,756 Bitcoins Stolen! Bitfinex Reveals Damage

Aug 03, 2016 at 12:10 // Blockchain
Author
Daniel Dabek

August 3, 2016 Bitfinex reveals 119,756 Bitcoins have been stolen from the exchange customers’ accounts. The compromise is limited to Bitcoins. Altcoin balances traded on Bitfinex are unaffected. Trading, withdrawals, and deposits are still frozen.

A statement from Zane Tackett - Director of Community & Product Development, Bitfinex:

“I can confirm that the loss from the hack stands at 119,756btc.”

Despite the wallet security protocol employed by Bitfinex that involves BitGo Multi-Signature wallet service the exchange happened to be stripped of nearly 64 million USD worth of Bitcoins in the hack. BitGo states that there have been no breach of their servers. The event is uninsured by BitGo due to customer negligence. Adjusting the security measures of the exchange is paramount. This way it can resume trading and begin repayment of customer losses.

Zane comments further:

“There were a number of security practices that were in place to make this the most secure, yet transparent way of securing funds and we used the company that prides itself and specializes in bitcoin storage. How these practices were bypassed, we're still investigating.”

At this time the Bitfinex website has reduced its service to a status report, though the July 28 cached version of the Terms of Use states:

“Notwithstanding anything else in these Terms of Service, in no event shall the combined aggregate liability of all Associates for any Loss hereunder exceed the amount of the amounts paid to Bitfinex in fees in the transaction giving rise, or alleged to give rise, to the Loss. You shall indemnify and hold the Associates harmless from any Losses in excess of such amount.”

Loss liability is limited to Bitfinex income from trading fees

Bitcoin’s price slid further overnight to a low of $465.00 on Bitstamp. Since then the price has retraced to $550.00. CoinIdol.com will continue to monitor the event and report on relevant details.

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