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Bitcoin prices crash following Bitfinex hack

News: Trading has been suspended on the platform.

By James Nunns

Bitcoin prices have fallen by up to 20% following the hacking of Bitfinex.

Bitfinex, a Hong Kong-based digital currency exchange, suffered a security breach which led to the theft of nearly 120,000 bitcoin worth around £49 million.

The breach is being investigated and all transactions on the virtual exchange have been suspended but it has had a significant impact on the price of the cryptocurrency.

Bitfinex wrote on its site: “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, bitfinex.com will be taken down and the maintenance page will be left up.”

The company said that the breach was limited to bitcoin wallets while other digital tokens traded on Bitfinex are unaffected.

This is not the first time that a theft has occurred relating to the cryptocurrency. In 2014 Mt Gox trading exchange declared bankruptcy when hundreds of millions of dollars in bitcoins vanished or were stolen.

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Bitfinex said that it 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.” Any steps to address customer losses will be looked at later in the investigation.

BitGo, the security firm that Bitfinex uses, said on its Twitter account: “As we directly notified our customers earlier today, our investigation has found no evidence of a breach to any BitGo servers.”

The use of BitGo meant that the breach only affected bitcoin wallets as they were kept separate from other currencies being traded.

A price correction is likely to take place in order to re-stabilise the bitcoin currency.

There is currently no detail on how the hack actually happened and questions will be raised about the apparent lack of working limits to restrict rapid withdrawals of large amounts of bitcoin.

Bitfinex did say on Reddit that limits were in place to restrict the amount of bitcoins that could be signed for and they are investigating how the limits were bypassed.

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