Thieves steal $64 million in Bitcoin as NiceHash is hacked

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Slovenian-based bitcoin mining pool and marketplace, NiceHash, has had almost $64 million in bitcoin stolen by hackers.

On Wednesday the 6th of December, the website went down, suspending all operations. The next day they issued a press release, stating “our payment system was compromised, and the contents of the NiceHash Bitcoin wallet has been stolen.” They urged users to change all personal passwords whilst they deal with the security fault.

The way NiceHash worked was by matching people looking to sell processing time on their computers to miners to verify bitcoin or other cryptocurrency users’ transactions, and then they would be paid with bitcoin for the service.

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Past cryptocurrency security issues
Within the cryptocurrency community, security has always been an issue, especially as most transactions can take place in perfect anonymity. Mt Gox, a bitcoin exchange, based in Tokyo, Japan handled over 70% of all Bitcoin transactions in 2013 and into 2014. However, in Febuary 2014, the exchange lost 850,000 bitcoins ($450million) at the time. Later evidence suggested the founder was at fault for the missing bitcoins and since have all been returned to their owners, but still the fear of fraud and theft is strong when it comes to bitcoin. Bitfinex, another exchange, had $72million worth of bitcoin stolen from customers’ accounts.

 

Bitcoin Growth

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Bitcoin has had almost exponential growth since the 1st of January 2017. From almost $1000 for 1 bitcoin all the way to its current value of roughly $13,400, an increase of 1340%. This increase in value and the anonymity of users has made the currency a target for hackers and digital thieves worldwide.

“We are fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity,” NiceHash claimed in the press release. We will have to wait and see if security really can be assured.

NiceHash Facebook Livestream

On the evening of Thursday the 7th of December, CEO Marko Kobal and co-founder Sasa Coh hosted a Facebook Livestream, where they explained that the losses were due to an employee’s computer becoming compromised and sophisticated hackers were able to suss out the entire company’s security from there. They went on to apologise and plead for the community’s help in this tough time.

Kobal spoke about how the company had paid out over $1billion in bitcoin to miners since the company’s creation in 2014. That success was what caused NiceHash to gain unwanted attention. “Unfortunately, we became a target, and someone really wanted to bring us down,” he said in the live stream.

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However, many users of the service voiced their opinions with comments stating everything from complaints and annoyance, to outright accusations that the theft was an inside job and the security could only have been compromised to such a degree from within. The claims may have no basis in fact, however the recent rise in bitcoin value and the increase in users on the NiceHash system. Judicial authorities have been notified and hopefully the crime can be solved promptly.