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Bitcoin value drops after hackers steal $65 million worth of it

The popular Hong Kong-based exchange Bitfinex revealed this week that 120,000 bitcoins were stolen after its system was breached.

by Kayla Ruble
Aug 3 2016, 3:42pm

Photo by Benoit Tessier/Reuters

Bitcoin values plummeted overnight, dropping by double digits after $65 million worth of the digital currency was lifted from a Hong Kong-based exchange.

The popular Bitcoin exchange Bitfinex revealed this week that 120,000 bitcoins were stolen after hackers breached its system and looted people's bitcoin wallets.

"We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen," the company said in a statement on Tuesday, the Guardian reported. "We are undertaking a review to determine which users have been affected by the breach."

After announcing the breach, Bitfinex put a hold on trading the currency on its exchange and other transactions, a move that appeared to kick off the spiraling value. In Tokyo on Wednesday, the currency was down 5.5 percent, according to Bloomberg. In the last two days Bitcoin has dropped 13 percent, the media outlet reported.

Related: A Nasdaq for Bitcoin: VICE News interviews the Winklevoss twins about the future of cryptocurrency

The latest hack highlights the continued concern over Bitcoin security. The currency's transactions are traceable through what is referred to as the blockchain, public information that shows where the coin has changed hands. But it remains challenging to verify who exactly is affiliated with each address.

The most infamous Bitcoin hack took place in 2014 when a hack of the now-bankrupt exchange Mt. Gox resulted in the loss of currency worth more than $400 million.

Despite Bitcoin's growing popularity — several major retailers now accept it as payment — there is no federal regulation or central bank oversight of the virtual currency. While global regulations are lacking, New York state took steps last year to develop what it called BitLicense framework to regulate bitcoin-related companies, establishing consumer and cyber security protection.

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