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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E.F. Mutton's picture

I hate it when that happens.

Budnacho's picture

Oh yes....VERY secure.....lol'z

ParticularlyStupidHumanoid's picture

How do you hack a brain wallet? (This is a type of Bitcoin wallet).

OpenThePodBayDoorHAL's picture

It's easy. One guy picked a line from a book of poetry in Afrikaans, that took about 1 hour to crack. Gone. Don't use brain wallets. Just use the regular wallets, you know, the ones that internet security legend John McAfee says "are a hacker's paradise". Yeah, those ones.

Cognitive Dissonance's picture

I am waiting for the Bitcoiners to rush out and assure everyone the Bitcoins were not at fault, but rather the exchange/brokerage.

So how do you think those whose Bitcoins were stolen feel about the fact it was an exchange problem and not Bitcoin itself.

I suppose they should call up the FDIC and put in a claim for that there Bitcoin insurance.

Edit: If I were the deep state and I wanted to undermine something as dangerous to the established power centers as Gold is, maybe I might hack a vulnerable exchange and steal a few valuables. If nothing else this will ramp up the call for official regulation and protection.

Just sayin'

GunnerySgtHartman's picture

I'm waiting for some tort lawyer to file the first lawsuit over bitcoin.  I only hope that if he wins, he gets paid in bitcoin.

Schmuck Raker's picture

Do you only buy Gold from a "trusted" merchant/exchange?

Difference in crypto is lack of track record/rep of entities in the space.

"If you don't hold your private keys, you don't have Bitcoin."

Sound familiar?

Cognitive Dissonance's picture

Sounds like a need for governmental regulation to determine who is trusted and who is not.

/sarc

seek's picture

While I don't disagree -- the FDIC sure as hell didn't insure the central bank of Bangladesh (or Ecuador, for that matter) when it was hacked.

The USD is arguably more vulnerable, it's just we collectively eat the cost in bank fees for bank fuckups, credit card hacks, etc, and it's fixed with a ledger entry and a charge-off.

swmnguy's picture

Oh, absolutely.  USD's get stolen all the time in our system, through various portals.  I travel a fair amount for work, and use one specific of my business credit cards for travel expenses.  I have to replace that card about once a year.  I've never lost it, mind you.  My credit card company contacts me with bogus expenditures when somebody at an airport or hotel or cab company steals my number.

I'm pretty sure banks won't get serious about protecting financial information because if they did, they wouldn't be able to play ignorant at the enormous amounts of drug and weapon money laundering they profit from.  It's more profitable for them to keep things the way they are, just eating the costs of fraud, that to give up all the profits to be made from the dirty money.

Cognitive Dissonance's picture

It's more profitable for them to keep things the way they are, just
eating the costs of fraud
, that to give up all the profits to be made
from the dirty money.

The bank eats nothing. They pass along the cost in higher CC interest rate charges and various other fees.

RedDwarf's picture

"I am waiting for the Bitcoiners to rush out and assure everyone the Bitcoins were not at fault, but rather the exchange/brokerage."

You say that like it's not 100% true.  Holding the bitcoin system to account for what a 3rd party does is stupid.  It was in fact the exchange that is fully at fault there.  Explaining the truth to people is called 'education'.  What you are doing here by intimating that this is not the case is called 'propaganda'.

"So how do you think those whose Bitcoins were stolen feel about the fact it was an exchange problem and not Bitcoin itself."

It sucks.  I lost 1 bitcoin when Mt Gox went down years ago.  However emotions are no replacement for truth.

"I suppose they should call up the FDIC and put in a claim for that there Bitcoin insurance."

FDIC is a scam.  However I think we will eventually see crypto-exchanges take out insurance for this type of thing.  That is what real insurance is for.

" If I were the deep state and I wanted to undermine something as dangerous to the established power centers as Gold is, maybe I might hack a vulnerable exchange and steal a few valuables. If nothing else this will ramp up the call for official regulation and protection."

If the State could realistically and effectively capture and regulate decentralized cryptos they would have done it already.  So many people like you think the Deep State is made of omniscient omnipotent magical super-babies or something.

In the end it does not matter if it was Deep State hackers, or just regular greedy hackers.  Hackers are predators in the jungle that is the internet, preying on the weak.  Sucks for the prey, but in the end we will see stronger exchanges and more resiliant systems.  If this is the Deep State, all this will do is pave the way for a stronger crypto system.

Cognitive Dissonance's picture

Sorry...forgot the /SARC tag.

I remember a day not so long ago on ZH when it would have been obvious. Sadly that day is long gone.

Bitcoin doesn't need to be hacked in ordered to be corralled or destroyed. It can simply be outlawed and hounded until it dies. The fact this has not happened as of yet is not a testimony to how bullet proof Bitcoin is, but to the fact it is enabling the state or its minions in some way unknown to you and me.

When, and if, it is no longer useful to the state, it will be shot in the head and left to die. Nothing fucks with the almighty dollar unless the dollar wants something to fuck with it. This doesn't mean the dollar is invincible, just that it will not go down without a long and bloody fight.

MaxThrust's picture

You think in evil ways Cog.

I like it.

Cognitive Dissonance's picture

To understand evil one must clearly see, understand and acknowledge the evil within all of us. The biggest deceit we indulge in is believing we would never do this or that, we are better than they and them.

We are all whores. The only real question is our price. Turn the power off for a few weeks and see what you and I are capable of.

That which we deny the hardest has the most influence over us. I do not deny my inner evil and whore. In fact I am at relative peace with my inner evil and whore. ;-)

blentus's picture

Bitcoins were not at fault.

I would really like to hear your explanation on how 'Bitcoins were at fault'.

Cognitive Dissonance's picture

You miss my sarcasm directed towards the few manic Bitcoiners who are enthralled by their greed and lust for moar. Of course the Bitcoins are not what were hacked. I state clearly the exchange was hacked.

But there is no doubt there are a few Bitcoin enablers and apologists here on ZH are they always come out under articles such as this. That was who I was having some fun with.

Please check your funny bone at the door.

bezel-bob's picture

LULZ... "Whats in your wallet" ?

ParticularlyStupidHumanoid's picture

How do you make a brain wallet out of gold / paper money? You can, with Bitcoin. Know what that is? Ever hacked one before?

herbivore's picture

A mere $50 million fraud can't stop Bitcoin. This is the greatest mania since, since I don't know when. I used to think tech stocks circa 2000 were a mania but this cryptocurrency mania puts that to shame. 

Justin Case's picture

$50 million fraud can't stop Bitcoin.

Maybe a few have stopped trading since they are out of money, but, hey whats a small sacrifice for the herd.

JethroBodien's picture

Yes.  Its the ultimate something for nothing.

Osmium's picture

So if you purchase stolen bitcoins can you be charged with receiving stolen property?

fulliautomatix's picture

A legal precedent to be set in the CoinValidation case where crypto is assessed as issued currency (in which case its' utility outweighs the 'inherent taint or defect in a title to property' and the bona fide recipient (the bank in the 1749 case) is not required to make good the loss) or not. So the currency isn't withdrawn because stolen.

[The original argument apparently deviates from Roman law which is par for the course for the development of common law through the Isles at this time.] 

ParticularlyStupidHumanoid's picture

Out of mere curiosity, and by no means in having interests of my own, someone inquires as to the price of such bitoins at present.

EddieLomax's picture

If the government wants to do that, then sure.

If they did then that would make things very interesting.

ParticularlyStupidHumanoid's picture

Because deligitimizing some bitcoin would legitimize the remaining bitcoin.

Omen IV's picture

if you bought stolen bitcoins - how do you know if they were stolen? or are they like $100 cash bills easily transferable? or do you have to prove the provenance?

ParkAveFlasher's picture

Are Bitcoins even "property"?

archem's picture

they would be able to see where these stolen coins ended up, and they already know to which wallets they were transferred.

i believe BTC is much more "trackable" than digital fiat, and certainly more so than cash.

It's up to the authorities to find the owners of the wallets to which they were transferred

BarkingCat's picture

Authorities don't care

Justin Case's picture

One of Bitcoin's best quality is that it's anonymous and it's untraceable, that's why nobody declares capital gains on it. Nobody knows nuttin bout the user. All under da radar of yuge Gov't. Land of the free, utopia.

Buckaroo Banzai's picture

It's not anonymous, it's pseudonymous.

It uses a public ledger, so it's 100% traceable, assuming you can attach real identities to pseudonymous identities, which can be done using social engineering and/or big-data relationship and transactional analysis.

These facts become clear to anyone who invests literally about five minutes to trying to understand what BitCoin actually is.

Raffie's picture

Was not the 1st hack ever and will not be the last.

Omega_Man's picture

let's hack them all for free bits coins 

tmosley's picture

>Sophisticated hacker attack by high IQ gooks

>Nigger walks off with a bucket filled with gold

Hahaha.

I am Groot's picture

LOL, fake money. More worthless than the green toilet paper we have now. I'll bet that pole dancing Bitcoin guru didn't see that coming.

gunzeon's picture

And you could lift the 50mil worth of gold they might already have bought ?

wmbz's picture

Bitcoin account holders are insured for this type of event, correct? Or are they on their own, tuff shit... and it's gone!

 

affirmed_78's picture

You're on your own brotha.  The ledger is irreversible.

cristo's picture

this is when the blockchain will come in handy you will be able to track where when who has the bitcoins because of the all important ledger 

that's keeps everything legit . SARC .

gunzeon's picture

I woulda thought 4000 coins mighta pulled the price down ... still, a bargain at 13,500 !

Goldbugger's picture

Whoops can't hack GOLD. Only steal physical.

tmosley's picture

Or issue a confiscation order forcing you to hold on to it for a half century and face massive jail time if you get caught with it.

therover's picture

Bullshit...that can be done to ANYTHING including your precious Bitcon.