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Blockchain Semantics Blog India's Biggest Bitcoin Theft- Coinsecure

India's Biggest Bitcoin Theft- Coinsecure

By Swati Keswani | April 18, 2018, 2:09 p.m. GMT

It’s just 15 days from when RBI issued a directive for lenders to close their bank accounts of firms dealing in cryptocurrency in its latest move, in order to protect banks from the risk associated with it, one of the most popular cryptocurrency exchange reported a breach where not 1, not 2, but around 438.318 bitcoins were stolen that sums up to Rs. 19 crores. 

This is probably country’s biggest bitcoin theft recorded till now and according to the media reports, it was exposed when the users of platform complained about not being able to access their funds in last few days. 

And then Coinsecure officially stated about the situation on their website. "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," said the letter to the users, adding that, "Our system itself has never been compromised or hacked, and the current issue points towards losses caused by an exercise to extract BTG (Bitcoin Gold) to distribute to our customers. Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys."

But what exactly happened??

According to the FIR, the company says it is the insider job. The private key of company’s bitcoin wallet through which all the transaction are carried is held by Company's CSO, Amitabh Saxena, and CEO Mohit Kalra. 

"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 incident reported by Dr. Amitabh Saxena does not seem convincing to us," read the FIR. And for the same reason, Coinsecure has requested concerned authorities to confiscate the Passport so that he cannot leave the country.

Then the exchange found that all the bitcoins that were stored offline had disappeared and also found that that the private keys were leaked online that led to hack, the police investigation found that the private keys were exposed online for more than 12 hours and are under further investigation to know if a malware infection led to the hack. 

Company while inspecting found that all the data/logs of wallets affected have been erased and there was no clue left to track where the bitcoins were sent.

But according to the message posted on their official website, the INR money is safe and secure. And the stolen BTCs are being tracked, yet to be recovered. That msg also implied that based on the result of the investigation users might receive their money in terms of INR equivalent to their BTC. 

Bitcoin’s closing price on 9th April (the Black day for Coinsecure, when BTCs were stolen) was around $6773.94. This implies that if Coinsecure is unable to salvage the lost BTCs, users might suffer the loss of few percents as of today’s BTC price.

Along with promising to give back all the money to the affected users, Coinsecure has also declared the bounty of around 2 crores to someone whoever helps to recover them.


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