Bitcoin tanks after exchange breach
A MAJOR Hong Kong-based Bitcoin exchange has suspended trading after US$65 million in the virtual unit was reportedly stolen by hackers – sending the digital currency plunging more than 20 percent.
Bitfinex said it had suspended all transactions after discovering that some users’ Bitcoins had been taken.
“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,” the company said in a statement on Aug 2.
The value of the often-volatile currency plunged yesterday to as low as $482.82 from $603.06 before rising to $539.53 yesterday.
The breach is the latest blow to digital currencies after The New York Times reported in June that hackers diverted more than $50 million from an experimental fund of another platform that trades Ether, a similar unit to Bitcoin.
But the biggest case was in 2014, when the Tokyo-based Mt Gox trading exchange, then the largest in the world, declared bankruptcy when hundreds of millions of dollars in Bitcoins vanished or were stolen.
The company admitted 850,000 coins – worth around $480 million at the time – had disappeared from its digital vaults.
The collapse left a trail of angry investors calling for answers and denting the virtual currency’s reputation the world over.
Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet, and are not backed by any government or central bank, unlike traditional currencies.