Nearly Rs 20 Crore Stolen In India’s Largest Bitcoin Theft, Rs 2 Crore Rewards For Recovering Lost Bitcoins

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CoinSecure, an Indian cryptocurrency exchange, said nearly Rs 20 crore were stolen from its bitcoin wallet, according to media reports. Although this might seem like a script from the Ocean’s series, this is India’s largest bitcoin theft recorded.


 


CoinSecure registered an FIR with the Delhi Cyber Crime Department on 10 April. The case is currently under investigation.

The theft is expected to further weaken trade in cryptocurrencies, as it is going to add to the disregard by the government for the cryptocurrency. They claim that bitcoins are linked to Ponzi schemes that offer unusually high returns to early investors.


What happened?

Coinsecure, which has over 2,00,000 users trading on its platform daily, said that around 438 bitcoins, which were stored in a password-protected virtual wallet were siphoned off to an unknown destination on the internet after the details were leaked online.

The exchange claims an insider job in the theft and suspects its chief security officer, Amitabh Saxena, of being involved in the hack.Coinsecure also requested Delhi police to seize Saxena’s passport, fearing that he may leave the country.

The alleged hack supposedly occurred when Saxena was extracting bitcoins to distribute it to its customers.

The funds lost were kept in a ‘cold wallet’ where funds are stored offline, as opposed to a ‘hot wallet’ which is a part of the exchange connected to the internet. However, it is still unclear why the private key which is stored by the company offline was made available online leading to the hack.

About 11,000 customers are said to be affected by the reported theft which is the biggest cryptocurrency theft in India.

“We regret to inform you that our bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control,”

the company said in a statement posted on its website.


What do experts think?

“It is for reasons like these that there is a need to regulate crypto-exchanges,”

said Anirudh Rastogi, founder and managing partner at TRA Law, a firm that specialises in emerging technology businesses.

Rastogi feels that pushing the exchange business out from the formal economy to the informal cash economy to operate under the radar will only worsen the problem.


What now?

The company claims to have the digital address to which the assets were sent after the hack.

It has shared the wallet address to which the 438 odd bitcoins were transferred to on their website.

The stolen amount of 438.318 bitcoins was transferred to the hacker’s wallet over a span of two days in small tranches.

However, the hacker has been sending the stolen bitcoins to multiple addresses. Now, the amount left from the stolen wallet is 139.420 bitcoins.

This essentially means only Rs 7.39 still remains of the Rs 20 crore that was siphoned off.

Interestingly, the wallet address to which the initial amount of 438 bitcoins was transferred to was created on the day of the hack and was not an old account.

“We will announce the refund process in the next 5-10 days. We are working to get the website back up and allow customers to log in and withdraw funds,”

said Mohit Kalra, chief of bitcoin exchange Coinsecure.

They said they would pay a bounty of Rs. 2 crores to anyone who helps them recover the lost bitcoins.


The Reserve Bank of India has already barred banks from facilitating trade on virtual currencies and mandating them to unwind their existing relationship with exchanges within three months.

Asia, Vietnam and South Korea have also suffered millions of dollars worth of fraud and embezzlement in some of the cryptocurrency businesses. Earlier this year, one of Japan’s cryptocurrency exchanges was hit by a daring $530 million theft of digital money.


Also Read: Alibaba To Launch its Own Crypto-Currency Soon!