Millions of Funds in Coinsecure Cryptocurrency Stolen, CSO Blamed

On of Coinsecure’s key executives is being accused of involving himself in stealing investor funds, making it the latest in a long line of cryptocurrency exchanges that have lost investor funds in what looks to be an inside job.

Dr Amitabh Saxena, the Coinsecure Chief Strategy Officer (CSO), has been accused by the Indian cryptocurrency exchange of being involved in the huge loss of 438 Bitcoins worth $3.3 million. Coinsecure has requested that Saxena’s passport be seized as he may be a flight risk and also asked local law enforcement to investigate this matter quickly.

Will Coinsecure Work Hand in Hand with Local Law Enforcement to Recover the Stolen Funds?

From the complaint that was filed with local law enforcement in New Delhi by Mohit Kalra, the Chief Executive Officer (CEO) Coinsecure, Saxena was purportedly the only one to hold the keys of the Coinsecure main wallet apart from the CEO. Saxena also allegedly claimed the loss of 438 Bitcoins occurred through the process of extraction of Bitcoin Gold and private keys for customer trading and this did not convince Mohit Kalra at all.

Saxena told Kalra on 9th April that these funds were lost due to some unknown attack according to the police statement which says “As the private keys are kept with Dr Amitabh Saxena, we feel that he is making a false story to divert our attention and he might have a role to play in this entire incident.”

The Hackers Seem to Have Successfully Managed to Disapprove Coinsecure

Coinsecure went ahead to emphasise that their system has never been hacked or damaged, it has decided to close its services until further notice as it investigation continues. 

Coinsecure says “We are working around the clock to restore services and to try to recover all of the lost funds, and we shall keep all our users posted on the outcome of the details to ensure utmost transparency. We are hoping that as users of Coinsecure, you will stand by us in this hour of need by providing us with the support as we diligently work to ensure that all of our customer’s funds are recovered and to leave no stone unturned.” 

Coincheck said that regardless of the funds that were stolen being recovered, cryptocurrency users should be compensated by Coinsecure with utmost good faith.

Cyber Security Experts vs Police Cyber Cell

The Times of India says that the Delhi Police Cyber Cell has confirmed the registration of the complaint and that the private keys of Coinsecure’s wallet leaked online plus all the data logs relating to affected wallets had been erased. Cybersecurity experts said that the private keys- the password that is kept by the company is never connected to an online system but according to the Police’s investigations, it found out that not only were the private keys online but also were kept like that for over 12 hours. The police are also interested in knowing whether there are possibilities that a malware infection led to the hack.

What Can the Accused CSO Face if Found Guilty?

The last time a similar incident “ lost $375 million in Bitcoin” that involved a high profile theft at a cryptocurrency exchange that also pointed toward an inside job was that of Mt. Gox in 2014 when Mark Karpeles the ex CEO of the strong cryptocurrency post was accused of embezzling over a billion dollars. Mt.Gox filed for Bankruptcy in Japan. Karpeles protested his innocence and he was to face up to 5 years in jail if found guilty. Prosecutors in that case said that the exchange had been used for money laundering purposes and related crimes. They continued to say that Alexander Vinnik, a 37 year old Russian national tried to conceal activities but links with the proceeds of the Mt.Gox debacle exist.