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Bitcoin Worth Millions Stolen Days Before US Exchange Opens

Bitcoins worth millions stolen, re-think before you invest in cryptocurrency!

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FILE - A bitcoin logo is displayed at the Inside Bitcoins conference and trade show in New York.
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A bitcoin mining company in Slovenia has been hacked for the possible theft of tens of millions of dollars, just days before the virtual currency, which hit a record above $15,000 on Thursday, is due to start trading on major U.S. exchanges.

NiceHash, a company that mines bitcoins on behalf of customers, said it is investigating a security breach and will stop operating for 24 hours while it verifies how many bitcoins were taken.

Research company Coindesk said that a wallet address referred to by NiceHash users indicates that about 4,700 bitcoins had been stolen. At Thursday’s record price of about $15,000, that puts the value at over $70 million.

There was no immediate response from NiceHash to an emailed request for more details.

“The incident has been reported to the relevant authorities and law enforcement and we are cooperating with them as a matter of urgency,” it said. The statement urged users to change their online passwords.

Slovenian police are investigating the case together with authorities in other states, spokesman Bostjan Lindav said, without providing details.

The hack will put a spotlight on the security of bitcoin just as the trading community prepares for the currency to start trading on two established U.S. exchanges. Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on crosstown rival CME Group’s platforms later in the month.

That has increased the sense among some investors that bitcoin is gaining in mainstream legitimacy after several countries, like China, tried to stifle the virtual currency.

As a result, the price of bitcoin has jumped in the past year, particularly so in recent weeks. On Thursday it surged to over $15,000, up $1,300 in less than a day, according to Coindesk. At the start of the year, one bitcoin was worth less than $1,000.

Bitcoin is the world’s most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.

Miners of bitcoins and other virtual currencies help keep the systems honest by having their computers keep a global running tally of transactions. That prevents cheaters from spending the same digital coin twice.

Online security is a vital concern for such dealings.

In Japan, following the failure of a bitcoin exchange called Mt. Gox, new laws were enacted to regulate bitcoin and other virtual currencies. Mt. Gox shut down in February 2014, saying it lost about 850,000 bitcoins, possibly to hackers.

Ali Zerdin in Ljubljana, Slovenia, and Carlo Piovano in London contributes to this story.(VOA)

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How can you trade in Bitcoin in India?

This will be the country's first app-based wallet that enables bitcoin transactions using a mobile number

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Pluto Exchange has launched first app that will trade in bitcoins in India
Pluto Exchange has launched first app that will trade in bitcoins in India Picture credits: Wikimedia commons

Dubai based “Pluto Exchange” has launched a Bitcoin trading app specifically targeted at the Indian market. The app was announced by Pluto Exchange founder and CEO Bharat Verma.

All about the app

  • This will be the country’s first app-based wallet that enables bitcoin transactions using a mobile number.
  • The app offers a solution to the coordination problem between payment processors, financial gateways and banks.
  • All other apps already in the market do transactions using bitcoin addresses, which are long and prone to error while copying. This app will enable transactions using mobile numbers only, which are just 10 digits.
  • By using a four-digit personal identification number (PIN), users can now buy, sell, store and spend bitcoins via a mobile number.
  • The app would permit a range of transactions, including payments, remittances, business-to-business commerce, supply chain finance, asset management and trading.

RBI on Bitcoin

Bharat Verma, CEO, Pluto Exchange said that the Reserve Bank of India is concerned about the use of cash for dealing in virtual currencies, whose values have turned volatile recently.

“The RBI considers bitcoins as decentralized trading that is completely unregulated… so their status is not clear,” he said.

Current scenario of cryptocurrency in India

In India, there are at least 15 bitcoin exchange forums, with the majority being set up over the past two years. Bitcoins have been trading at more than Rs 10 lakh each, while people are investing amounts ranging from Rs 3,000 to several lakhs of rupees to buy these.

According to investigation agencies here, with the demand and price of cryptocurrencies on the rise, cyber criminals have found innovative ways to dupe those looking to invest. (IANS)

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