Bitcoin Plunges After $65 Million Stolen from Exchange in Hong Kong

Bitcoin sink after nearly 120,000 units of digital currency bitcoin worth about $65 million was stolen from one of the largest exchanges in Hong Kong.

Hong Kong-based exchange Bitfinex said Tuesday it halted trading, withdrawals and deposits after discovering the security breach. Bitcoins dropped almost 20 percent this week after the news broke.

“Yes — it is a large breach,” Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform, wrote in an e-mail. “Bitfinex is a large exchange, so it is a significant short term event, although Bitcoin has shown its resiliency to these sorts of events in the past.”

Bitfinex on Wednesday confirmed that 119,756 bitcoin was taken by the hackers, worth about $65 million. This marked that the second-biggest security breach in history. There was a larger breach at MtGox, a Tokyo-based bitcoin exchange in 2014. The exchange filed for bankruptcy after hackers stole an estimated $650 million worth of customers’ bitcoins.

The exchange said it was still investigating details and cooperating with the authorities.

“We will look at various options to address customer losses later in the investigation,” Bitfinex wrote in a blog post. “We ask for the community’s patience as we unravel the causes and consequences of this breach.”

Bitfinex also said as it goes through individual customer losses, it may need to figure out how to  settle open margin positions, associated financing, or collateral that were affected by the security breach.

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