Largest Crypto-Mining Exchange Confirms It Was Hacked, $62 Million In Bitcoin Stolen

Tyler Durden's picture

Update: as @MillionsBitcoin points out....

... the total amount of bitcoins stolen from Nice Hash is 4736, or just over $62 million, and they have ended up at the following address:

* * *

Earlier

As Bitcoin explodes higher on what now appears to be constant demand out of South Korea, there were unconfirmed (at least until recently) reports that Nice Hash, the largest crypto-mining marketplace, has been hacked with over 4,000 bitcoins worth over $50 million stolen.

Visits to the website over the past 13 hours were greeted with the following maintenance notice.

According to TweakTown, there are some posts by people saying that NiceHash transferred all of the BTC sitting in miners' wallets into a single wallet before NH fully went down.

If NiceHash were hacked, then it makes sense that the hacker pushed all of the Bitcoin into a single wallet and then transferred it to their own wallet. There's no way of getting it back if that's the case, and if that is indeed the case, there's no way NiceHash can restore money to miners' wallets. If we're talking about $50 million or more, it's going to hurt, bad.  

Earlier, WklTribune reported that they've been in contact with NiceHash CEO Andrej Nabergoj, who said that NiceHash is "assessing the situation and working with the authorities. We'll have a public statement shortly".

And then, moments ago NiceCash confirming there was a security breach:

From the release:

Unfortunately, there has been a security breach involving NiceHash website. We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours.

 

Importantly, our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen. We are working to verify the precise number of BTC taken.

 

Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days. In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency.

 

We are fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity.

 

We would not exist without our devoted buyers and miners all around the globe. We understand that you will have a lot of questions, and we ask for patience and understanding while we investigate the causes and find the appropriate solutions for the future of the service. We will endeavour to update you at regular intervals.

And the best part:

While the full scope of what happened is not yet known, we recommend, as a precaution, that you change your online passwords. We are truly sorry for any inconvenience that this may have caused and are committing every resource towards solving this issue as soon as possible.

One wonders: if one has just had millions in bitcoin stolen, will changing the password really help?

So far Bitcoin has taken the massive hack well, and continues to rise, approaching $13,500.

The news could be negative - at least in the short-term - for companies catering to "home miners" such as Nvidia, the biggest beneficiary of the bitcoin mining euphoria.

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NoDebt's picture

I picked these 1060s up cheap on Craigslist.  Have you seen the asking prices on 1080s?  Holy shit!  And that's even if you can find one to buy.  I bet you 99.9% of the 1080s sold in the last year have gone to online miners, not to people who actually use them for "gaming".

 

Ranger4564's picture

I bought a 1080 TI for rendering. I might buy a second. It's $800 each.

Ranger4564's picture

GTX 1080 TI 3584 cuda cores. But I don't know if ETH or BTC use the cuda cores of the main graphics processor. I think they use the cuda cores. I never understood people saying the 1060's were more efficient. Too few cuda cores, takes up more slots just to get the same compute power.

new game's picture

see-eye-ah

that was easy...

blentus's picture

I have 4 Ledgers and a Trezor.

And I have far far far far far far far far far (you get the idea) less than what they had in that wallet.

Darwin always wins, I guess.

francis_the_wonder_hamster's picture

"They used ONE FUCKING ONLINE WALLET for their entire Accounts Payable, apparently."

For a second, I was going to say "nobody can be that stupid", but then I remembered I live in Kalifornia.

Ajax-1's picture

What if "NiceHash" wasn't actually hacked? Consider the possibility that an insider laid the groundwork for the heist and was able to cover his/her tracks via proxy servers. It's the perfect pretextural crime. As a side note, I just checked on my gold and silver. Ahh yes, it's right where I left it and I'll sleep like a log tonight.

PhiPhi's picture

Let me check my offline  wallet...Ahh yes, right where I left it next to my gold and silver.

 What's the difference?

https://cdn.jmbullion.com/wp-content/uploads/2014/10/Gold-Heists_06-top.jpeg

Ajax-1's picture

The difference is that precious metals have intrinsic value that have withstood the test of time as a medium of exchange in commerce. Besides it's aestetic beauty as a component of fine jewelry, Gold has many industrial applications as well due to it's superior ability to conduct electricity. You see, Gold is a very rare commodity derived from exploding supernova's that travelled billions of miles through outerspace before entering Earth atmosphere and falling to Earth. Conversely, tell me about the intrinsic value of digital currency. Can you make jewelry out of it? Tell me about the industrial applications of BitCoin?

PhiPhi's picture

Let me check my offline  wallet...Ahh yes, right where I left it next to my gold and silver.

 What's the difference?

https://cdn.jmbullion.com/wp-content/uploads/2014/10/Gold-Heists_06-top.jpeg

Seeing Red's picture

It wasn't amusing till I clicked on "comments".

KFBR392's picture

newbie to this so forgive the ignorance...how do you secure your private keys on coinbase? and how secure is a coinbase wallet? serious responses please. half of you will think im a dumbass for owning and not knowing...i get it

Mine Is Bigger's picture

It took nearly a day for bitcoin to go from 12,000 to 13,000 becaue the stolen bitcoins were dumped on the market.

We will see 14,000 by tomorrrow morning now that the overhang is cleared./sarc

knukles's picture

So no different than unallocated gold, eh?

STP's picture

Ask the Libyans what happened to their gold?

laser's picture

Ask Hillary what happened to Libya's gold.

shamus001's picture

If BTC is stolen (re-allocated) from YOUR WALLET to "Thieves" wallet, then the value and ownership of bitcoin remains the same.  Said owner would have to somehow find a location to liquidate such a massive hoard of bitcoin.  I don't presume to be closely in the know, but I am unaware of anyone selling 50 million in vessels/property/gold etc .... I suppose this crook will have to engage in several (hundred?) smaller transactions to move this massive volume of digital nothings..... a couple hundred thousand in fiat value at a time.

Agstacker's picture

Thats like saying 'Washington Mutual lost all of some people's money, but they won't lose my money.  The value of my money stays the same.'

 

Sounds pretty stupid, doesn't it?

CH1's picture

Assume it keeps going up anyway

And why shouldn't it? Does the dollar crash when a bank gets robbed?

Not that ZHers care about reality.

Agstacker's picture

You must be a ZH'er as well, you've created an avatar and seem to be commenting on the stories posted here.  You must not care about reality according to your own admission.

misalkin's picture

Old good rule from gold investing:

If you don't hold it you don't own it!.

Don't hold your gold in ANY 3rd party.

Same applies to BTC. Put crypto on your addres, print password and store in safe in fireproof box.

Ahmeexnal's picture

21 million buttcoins crying out in pain in the void of cyberspace....where no one can hear them.

Satoshi == NSA.

Bunga Bunga's picture

Like SWIFT hacks never happen?

83_vf_1100_c's picture

You can work that out with a small rolling pin. Hacked bitcoins, not so easy.

aurum4040's picture

Your gold gets hacked every single day in NYC round 7am ish EST and London around 2pm EST. Hammer hacked. Such a shame too. 

FEDbuster's picture

CorzineCoin?  and it's gone....  Meanwhile, MSM looking into Trump and Russia's involvement in the hack.

YUNOSELL's picture

It could happen to anyone

 

Midas's picture

This doesn't prove there is a weakness in crypto just like Tulving going out of business and leaving people hanging on their gold orders doesn't demonstrate a weakness in gold.  What it shows is if you are not hodling, you are not doing it right.

jcaz's picture

"This doesn't prove there is a weakness in crypto....."

Wow.

E5's picture

Let me guess.  You don't think there is a weakness in Central Banks that get hacked but you use different logic for Crypto.  Am I right?https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

 

Agstacker's picture

Is crypto FDIC insured genius?

GodSpeed_00's picture

Wow what? Bitcoin wasn't hacked, these guys were hacked and obviously didn't have security up to par.

blentus's picture

Wow what?

He's right and I don't quite know what you are wowing.

Greenspazm's picture

@ hedgeless horseman

You must be friggin' naive to trust a "Trezor" -- which rhymes with "backdoor" -- to be a piece of hardware dedicated to safely storing your digital nothings.

HRClinton's picture

My 2013 HODLer stash is still there in Cold Storage, OFFLINE.

When I mine other CCs for fun, i make sure the Payout Settings are at automatic trigger levels that amount to ~ $30 payouts.

Thus, at worst, if the pool were to be hacked, I lose a maximum of $30, even if the entire pool is drained (by the developers?). I can live with that.

I also shop around for pools, to see which one works best with my HW, to make sure that the pool is not skimming my hash rate.

Street smarts in CC world.

BTW, WTF is up with those gimmicky award icons on MinerGate (a US operation)? Don't trust that site.

Consuelo's picture

 

 

This is not meant as a 'swipe', so don't take it the wrong way - it's just the way it came across.

Your comments read like someone conversing about a 'world-of-warcraft' type video game.

SixIsNinE's picture

well, playing crypto on the keyboard looking at a screen does feel rather "gamey"

not withstanding the ethereum site with the smartly dressed savvy folks looking all MBA like around the boardroom....

otherwise, binance has a bunch of whack-a-mole prizes up today - looks pretty slotty gamey

but hey, i'm late to the party but feels good to be on the up elevator!

go BTC :)

 

plus we get a more visceral "reality" check with the price moves

 

Abiotic Oil's picture

It was probably a DeepState™ job to try and control the price.

debtor of last resort's picture

We'll never know, even the hackers stay anonymous.

Herd Redirection Committee's picture

OOPS, we stole our customer's bitcoins by accident, and it can't be traced by us, just take our word.

At least they didn't invent 'tethers' or anything as a front for their theft!  Bitfinex's implosion will (allegedly) be the stuff of legend.

MonetaryApostate's picture

Nah, the serfs tomorrow will be saying...

"Cryptos are the awesomest!"

"I wasn't a victim, so I'm still good."

To those of you who don't get the true purpose of Cryptos, just think of them as Klepto Currencies designed to wreck entire economies globally, the final shove off the cliff for the banking cartels & kleptocracies.

In comes the world currencies into the digital black hole, down with Roman Empire she blows!

E5's picture

For you: central banks are robbed and you remain confident.

https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

 

greenskeeper carl's picture

Every single unit of fiat in all the cryptos combined is barely a drop in the barrel compared to the derevitive bubble thats waiting on the right pin to pop it. There isn't enough money in cryptos to crash antything, other than people's savings if they dumped too much of their own personal worth into them.