Thieves steal potentially millions of dollars in bitcoin in a hacking attack on a cryptocurrency company

By Becky Peterson

The contents of a digital wallet belonging to cryptocurrency company NiceHash, which included potentially millions of dollars worth of customers’ bitcoin, was stolen in a major security breach.

The hack affected NiceHash’s payment system, and the entire contents of the company’s bitcoin wallet was stolen, the company said in a Facebook post Wednesday afternoon.

“Clearly, this is a matter of deep concern, and we are working hard to rectify the matter in the coming days,” NiceHash said in the Facebook post. “In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement, and we are cooperating with them as a matter of urgency.”

The company did not respond to requests for comment.

NiceHash didn’t say how much bitcoin was stolen from its wallet or how much of what was stolen belonged to its customers. But some of the company’s customers speculated that around 4,736 bitcoin total were stolen — worth over US$63 million as of Wednesday afternoon.

They came up with that estimate by looking at the total amount sitting in a recently-created bitcoin wallet, which some company users have suggested belongs to the hacker. Although bitcoin owners are usually anonymous, the amounts stored in their wallets are publicly searchable online.

Many miners left money sitting in wallets on NiceHash’s platform 

NiceHash offers a cryptocurrency mining service. It lets customers people offer up their extra computer processing power for the high-energy calculations typically used to create — or mine — new bitcoin or other cybercurrencies.

Most of NiceHash’s users mine so-called altcoins — cryptocurrencies other than bitcoin — in exchange for their value in bitcoin. Users can also buy computer processing power from other NiceHash users.

NiceHash customers frequently move the cryptocurrency they earn on NiceHash off the service and into their own digital wallets or onto a bitcoin exchange. But some users have chosen instead to keep their earnings on NiceHash.

Rumours of the hack first appeared early Wednesday, and the site went down for maintenance soon afterward. Some NiceHash users reported on Reddit they lost their connection to the service while mining. Others said their balances on the website went down to zero.

NiceHash is only the latest cryptocurrency company to suffer a major hack in recent months. Despite the widespread notion that the blockchain technology behind bitcoin and other cryptocurrencies is safer and more trustworthy than that underlying other kinds of digital financial transactions, startups in the industry have struggled to secure their sites and software against hackers.

Another major hack occurred just last month on Parity, a digital wallet popular with startups collecting millions of dollars in fundraising. Around US$162 million in the cryptocurrency ether has been frozen after a novice hacker deleted a code library needed to access funds being stored in some Parity digital wallets.

See Also:
Crypto exchange Coinbase went down as bitcoin prices near US$11,000
Coinbase, the bitcoin exchange that had a wild week, just replaced its president
Coinbase has been ordered to hand the IRS info on its highest-rolling customers

Read the original article at Business Insider