Hackers Stole Approximately $72 Million Worth of Bitcoin

Hong Kong-based crypto-currency exchange Bitfinex, from which hackers stole about $72 million worth of bitcoin this week, said on Friday that it expected to “socialize” the losses among bitcoin balances.

In dollar terms, the theft of the 119,756 bitcoin revealed on Tuesday was the second-biggest security breach ever of a digital currency exchange. The theft accounted for about 0.75 percent of all bitcoins in circulation.

For the bitcoin industry and investors curious about it, a more fundamental questions is emerging: Has bitcoin’s original premise been compromised? If the idea was to give society a secure currency that couldn’t be tampered with by governments or fee-happy banks, what does it mean that bitcoin still seems far less safe than putting put money in those very banks?

This week’s attack is potentially the second-largest on an exchange since Japan’s Mt. Gox, and could further erode confidence in the virtual currency. Bitfinex was the largest exchange for U.S. dollar-denominated transactions over the past month, according to bitcoincharts.com. The price of bitcoin plunged more than 23 percent on Tuesday when news of the hack became public, trading as low as $465.28 on the BitStamp platform. On Friday, it was trading at $569.84.

“If this leads to legal action against Bitfinex it’ll raise a lot of interesting questions about how wallets and custody work,” Peter Todd, an active bitcoin code contributor based in Toronto, wrote in an e-mail.

The challenge for bitcoin remains building an infrastructure sturdy enough to repel hacks and fraud, while maintaining the currency’s independent roots.

“We need standards set by the industry that take into account the regulatory and cultural environment,” said Joseph Colangelo, the executive director of Consumers’ Research, a consumer-focused trade group involved in bitcoin. “There are a hundred different ways to skin the cat here.”

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