Bitcoin plunges after hackers steal $87m

A shop in Hong Kong displaying a sign saying it accepts bitcoins. The value of the often-volatile currency plunged more than 20 per cent yesterday after bitcoin exchange Bitfinex discovered hackers had taken 119,756 bitcoins, or about $87.2 million a
A shop in Hong Kong displaying a sign saying it accepts bitcoins. The value of the often-volatile currency plunged more than 20 per cent yesterday after bitcoin exchange Bitfinex discovered hackers had taken 119,756 bitcoins, or about $87.2 million at current prices, from the platform.PHOTO: AGENCE FRANCE-PRESSE
A shop in Hong Kong displaying a sign saying it accepts bitcoins. The value of the often-volatile currency plunged more than 20 per cent yesterday after bitcoin exchange Bitfinex discovered hackers had taken 119,756 bitcoins, or about $87.2 million at cur
A shop in Hong Kong displaying a sign saying it accepts bitcoins. The value of the often-volatile currency plunged more than 20 per cent yesterday after bitcoin exchange Bitfinex discovered hackers had taken 119,756 bitcoins, or about $87.2 million at current prices, from the platform. PHOTO: AGENCE FRANCE-PRESSE

HONG KONG • A major Hong Kong-based bitcoin exchange has suspended trading after US$65 million (S$87.2 million) in the virtual unit was reportedly stolen by hackers - sending the digital currency plunging more than 20 per cent.

Bitfinex said it 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 posted on its website late on Tuesday.

"We are investigating the breach to determine what happened... We will look at various options to address customer losses later in the investigation."

The company asked for patience while it investigated.

Bloomberg News reported hackers took 119,756 bitcoins, or about US$65 million at current prices, from the platform.

The value of the often-volatile currency plunged yesterday to as low as US$482.82 from US$603.06 on Tuesday, according to Bloomberg News data, before rising to US$539.53.

"Yes, it is a large breach," said Mr Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform. "Bitfinex is a large exchange, so it is a significant short-term event, although bitcoin has shown its resiliency to these sorts of events in the past."

The breach is the latest blow to digital currencies after The New York Times reported in June that hackers diverted more than US$50 million from an experimental fund of another platform that trades ether, a similar unit to bitcoin.

But the biggest case occurred 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 US$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.

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.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 04, 2016, with the headline 'Bitcoin plunges after hackers steal $87m'. Print Edition | Subscribe