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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bardot63's picture

...fully insured, of course.

0hedgehog's picture

One can't "lose" a bitcoin since one doesn't really have a bitcoin.

Miss Informed's picture

“Use your IRA to invest in Bitcoin”. What could go wrong?

A1 T's picture

Bitcoin is a bigger scam than the FED

0hedgehog's picture

I'm convinced now that bitcoin IS the fed!

VWAndy's picture

 Hacked? lol

Aireannpure's picture

Wow, more missing coins. It can only go higher, much higher. The IRS can figure this out. LOL.

A1 T's picture

See told you. That is shy the smart traders trade markets with Shepwave. Sticking with the winners.

roddy6667's picture

Go away. Post your spam on the Beenie Baby website.

Harry Lightning's picture

Earlier in this thread I asked a question about how a hacker could steal and then re-use a butcoin even if the coin has a unique identifier through its black chain. I received a very good answer back from one ZH reader saying that the public blockchain key can be converted into a privide alternative through a website called Monero or other "mixer" services.

Which leads me to another question...I have read that bockchain technology may have many different applications because of the uniqueness of the blockchain itself. The difficulty in "mining" a blockchain makes it as unique and protected an identifier as any kind of identifier presently employed. 

But if the unique blockchain identifier can be tampered with and even made to look like its actually a different blockchain or one that actually does not even exist (i.e., counterfeit), does the technology really have a future in replacing present methods used to identify and protect the identity of securities, documents and licenses ?

Will the same cat and mouse game of counterfeiters constantly trying to make false replicas of currency extend to the blockchain business, negatng what was thought to be a critical security advantage to blockchain over existing currency ? I am surprised that these mixer websites are as brazenly open as they are, considering that their purpose seems to be to aid nefarious and diabolical enterprises in the blockchain industry. You would think that the kind of outfits that support criminal activity would try to stay under the radar, although the manufacturers of radar equipment to detect police speed traps were quite open about the use of their product. .

VWAndy's picture

 They got hacked you got jacked.

D503's picture

Just insert your physical fiat currency in this end and watch us shred your digital fiat currency on the other! Don't you want to be safe?

0hedgehog's picture

And the price goes up even faster?

 

No, this is not a mania!

shovelhead's picture

Dear Nicehash user,

Thanks, bye.

directaction's picture

Everyone loves a good, sound, well-executed heist.

VWAndy's picture

 Man its really going to suck paying cap gains on that.

roddy6667's picture

Good one. Right over everybody's heads.

plum plum plum's picture

If I have $62mm in bitcoin, what is the best way to break it up across 10000 bitcoin addresses and cash out? Asking for a friend.

ali-ali-al-qomfri's picture

I wonder if there a security cam of the guy waiting by the exchange

and grabbing the bucket of bitcoin and running down the street?

 

HK VP9's picture

Tell us just how safe Shitcoin is now. LMFAO at people's stupidity. 

Irate Samurai's picture

This has absolutely nothing to do with cryptos. This has to do with idiots trusting their coins with a third party exchange. The very easy solution is to keep your cryptos in a wallet and not on an exchange. 

afronaut's picture

Just another hurdle for crypto burglars. It's a new challenge

flyingcaveman's picture

Nothing to do with it in the same way banks have nothing to do with money.

Mustahattu's picture

Haha it might be shitcoin to you.. understandably you feel real shitty cos you didn't buy a couple hundred "shitcoins" a few years back which are worth a few million today. So you opt to take your anger on bitcoin. Now that's real stupidity.

Flankspeed60's picture

The only way to hack old Luddite gold bugs is by home invasion. There would at least be the satisfaction of getting off several rounds of buckshot at the perps and then just follow the blood trail.

Sizzurp's picture

Actually there was a guy about 10 years ago who had a bunch of PMs in his home.  Sombody found out where he lived and did a little home invasion while he was asleep. The invaders tied he and his family up and took the PM's.  Luckily he wasn't hurt too badly.  Getting hacked is bad, but at least you don't run the risk of bodily harm.

afronaut's picture

 canada. Only criminals have guns. If your dog attacks an intruder in your home, you risk being charged. That's how screwed up it is in canada

Ron_Mexico's picture

actually I'd love to have some land that straddles the US/Canada border. That way I could keep my guns on the US side and so on.

Ron_Mexico's picture

that man should have had a 90-lb. pit bull for night time early warning/defense system. Just sayin'  Your plan is only as strong as its weakest link.

John C Durham's picture

Oh, BitCoin is so wonderfully secure that $50Million can just go away...occasionally?

saldulilem's picture

Coming soon to a wallet near you

Irate Samurai's picture

Don't keep your coins on a goddamn exchange. That literally takes the point out of having a decentralized currency. Keep them in a wallet and back them up.

jmc8888's picture

These are miners.  The withdrawl fee for many miners is more then what they make mining in a pay period, or two, or five or more.  Then it's just a huge percentage that goes lower the more they keep it on an exchange wallet.

 

I'm sure there were idiots keeping full bitcoins in their online wallets, but my guess is there are tens of thousands of people who had their GPU's work mining for 1-3 months that just got wiped out, because they couldn't get it out yet or Nicehash would of taken almost all of it out.

 

Many more people would of not been hacked had their withdrawl fee not been so steep to small owners.

2% withdrawl fee for over 0.15 BTC

The people mining 1-3 months would of likely been in the 30-60 percent range. 

 

If they just made it 2 or 3 percent for everyone, they would have had much less held on the exchange.

 

They also could of instituted a max amount for their users to keep in an online wallet.

 

Right now the hackers are utilizing the idiocy and greed of these operations to fleece them.  Many miners who couldn't wait to withdraw their BTC got screwed because of the setup.  They couldn't, not really.  So this has to change.  If a hack hit then, only dumb people get screwed, and while the amount in $$$ might be high, the number effected would be much lower.  This is going to hurt Nicehash, because a lot of people who were trying to do it right, got screwed.

 

I also have to wonder if this effects the people that had bitcoins in the exchange for payment to miners.  This hack might of killed the miners and the buyers of hashpower of nicehash, along with any Nicehash got for fees they held online.  So maybe all three.

 

In case anyone doesn't know, Nicehash sells hashpower to miners to mines ethereum, which they are then paid in fractions of bitcoin.  Like 2/100000 (0.00002) a day for say a GTX 1070. So when the fee was 0.0005 or recently, 0.0003, to get the withdrawl fee down to 10-20-30 percent you are talking about a very long time mining and having to hold it in a wallet.  It's easier for people running 8 GPU setups, but alot of people are using just the 1 or 2 they have in their PC. 

 

It's going to be interesting to see how this all plays out.

SweetDoug's picture

'

'

'

Bye the Fuggin' Dip!

 

OJO

V-V

roddy6667's picture

A new opportunity for instant wealth is to educate yourself on how to steal bitcoin and relabel it through one of the "mixer" websites. Then deposit it in a chain of bank burner accounts in fake names in Eritrea, Moldova, Bhutan, Myanmar, and East Timor. At the end purchase physical gold.

Beats getting an MBA and spending years on Wall Street. And just as honest. 

I'm too old for this shit, but all these out-of-work Millenials now have a job opportunity.

Brazen Heist's picture

Another Brazen Heist!

Justapleb's picture

I've always felt uneasy about cryptocurrency.  

 

slug200's picture

I'm gonna open a shit coin insurance operation.  The sheep will come for safety

 

(Deep in the legalese it will state that all shit coin claims will be paid off in slug coins)

Ron_Mexico's picture

hey, at least with slug coins you have the underlying value of the pot metal.

Mustahattu's picture

The world belongs to hackers now.

Grandad Grumps's picture

Bitcoin can never be safe.

friendly manitoba's picture

Cragslist 

 

will trade 50,000  pork bellies  aug 1962 for  4000  bitcoins   or a cup of coffee -

RaoulDuke66's picture

Not to worry. Today the value of what was stolen was $62 million. But next week it could be zero, so you'd actually have lost nothing. That's what makes Bitcoin so exciting. Just like Vegas. Or ice.

Wilcox1's picture

Good Lord !! Thought it was fitty jus a while ago. 

Golden Phoenix's picture

The US currently spends about 50% of every tax dollar collected just to service the national debt. And that's at an interest rate of almost 0. If interest rates spike even a little the debt will become completely unserviceable. The USD is a ponzi website on the verge of a 'Sorry, this site is no longer available' error. 

And people think Bitcoin is the crazy thing.

 

CHoward's picture

I'm sure there is a "FDIC" for cryptos, right??

 

BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

jetson5's picture

Which Global Authority was it reported to. Don't think our Federal Government Employed Authorities would give two fucks about the theft of BTC......

pparalegal's picture

I admit I am still trying to get all of this crypto lingo down. But today if I used N.H. it is like leaving my wallet on the front seat of an ulocked car in the ghetto? Sorry pparalegal, suck it up dude, it is just gone.

jmc8888's picture

More like there is an entity that forces you to leave it in THEIR wallet until what is supposedly yours in their wallet reaches a certain amount, and then you can withdraw it minus a fee.  They left THEIR wallet on the front seat of an unlocked car in the ghetto.

For many small miners this amounted to having to keep it in their wallet for months before any payout, and for many it just got stolen. It's one thing running 8 or 80 or 1800 GPU's 24/7.  But many people were just using their spare single or dual GPU PC setup for maybe 5-12 hours a day and so for some people it might have been 3-4 months worth of their mining.

 

Of course then you have the idiots who just left it in there.  People who have big setups that got paid weekly and are out the contents mined since the last payout.

 

Then you have the people who paid BTC to buy the miners work that also seems to have been stolen.  So the people who had BTC in the till waiting to be used to pay the miners also seems to have been stolen. 

So the miners payouts were stolen for past and essentially future work, unless they find replacements.  But then again, they're going to have to find replacement miners.

Basically Nicehash was the go between between miners and hashpower buyers, and both sides got screwed.  Nicehash itself probably lost a ton as well.

just the tip's picture

somehow, i sense a remake in hollywood in the offing.  hollywood only makes remakes anymore.

Thomas Crown 2020:  The Bitcoin Affair,  coming to a theater near you.  soon.