Published: Sat, April 14, 2018
Business | By Kate Woods

India's Biggest Bitcoin Heist: Coinsecure Reports Theft Worth $3 Million

India's Biggest Bitcoin Heist: Coinsecure Reports Theft Worth $3 Million

The digital currency exchange said that it had lost $3 million (nearly Rs 20 crore) from its bitcoin wallet, the biggest reported so far in the country's fledgling virtual currency market. According to The Economic Times, the exchange found that all the bitcoins that were stored offline had vanished. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys. The company has also requested police to impound his passport citing fear that he might fly out of country to evade legal hassle in India. In a letter posted on the homepage of its website, Coinsecure says that its system has never been hacked and instead laid the blame exclusively on its chief security officer (CSO), Dr. Amitabh Saxena.

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The firm has registered a complaint with the Delhi Cyber cell after it was not convinced by the alibi given by its chief security officer (CSO) Amitabh Saxena. It was later found that the private keys - the password that is kept by the company and is stored offline - were leaked online, leading to the hack, the TOI report added.

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The private keys are required to move cryptocurrency out of bitcoin wallet. "We regret to inform you that our Bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control", said the letter to the users, adding that, "Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract BTG to distribute to our customers. We have shared our suspicions with the Cyber Cell, and contacted specialists to find out the source of the hack and trace the bitcoins", TOI quoted Kalra as saying. "Doc comes with an extremely strong understanding of the crypto space and has a lot of ideas and implementations that he will be bringing to Coinsecure", the exchange said at the time, pointing to his scientific research articles on the blockchain space. The firm is working toward recovering the money and "we reassure all our customers that you will be indemnified from our personal funds", it said. The company has halted the exchange operations, as the police seized the company's servers. The exchange states that customer's funds are safe with Coinsecure and it will keep its users updated.

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The news has come as a jolt for cryptocurrency investors, after RBI recently announced that banks are no more allowed to deal with crypto currency exchanges.

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