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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cherry picker's picture

Dear IRS

I just stole $62 M in crypto today and the value went up 7% since I stole it.

Do I need to report this as a gain since it wasn't mine to begin with?

You are not going to steal from me what I stole from someone else are you?

Can you help me convert it to cash as they are numbered and I don't want to get caught.

Regards

One of your victims

headless blogger's picture

I thought this was supposed to never happen. That if someone breeched the sytem there would be a trail. Although, I admit I am not up on this technology.

moobra's picture

Because exponential growth is never associated with anything bad.

 

MusicIsYou's picture

Bitcoin hacked thats fcking funny. Do your computer apps have a virus? Ha here's a newsflash: your apps are a fcking virus.

MusicIsYou's picture

Oh do your smartphones have  viruses? Here's a newsflash: your damn phones are a virus.

MusicIsYou's picture

Get used to losing your cryptocurrency cause it's gonna happen more widespread and a lot more money lost.

MusicIsYou's picture

Awe did you folks lose some electrons you called money? Gee that's too bad.

Pi Bolar's picture

Show us a photo so we can make copies and put it up on lamp posts to see if anyone spots it.

Pi Bolar's picture

When reporting the theft to the police the CEO was unable to answer a simple question about the stolen crypto. "What does it look like?"

Hillarys Server's picture

"Hi, are you the one who called 911?"

-- Yes, officer.

"What's Bitcoin?"

-- Officer, on your way in the receptionist told me she's going to give you a --- job.

"Really?!"

-- No, but you know the excitement you felt just now?

"Yes...?"

-- That's Bitcoin.

Zero-risk bias's picture

Hmmmmm. 

didn't anyone tell them all not to leave things on exchanges??

TeraByte's picture

Tuilp bulbs on your table, but you cannot recognize such items.

SMD's picture

There was no "hack," faggots. Every one of these "exchanges" takes in money then when enough people want to get their money back the exchange says it was "hacked" and all of the money is gone.

zimboe's picture

And here's your money and *POOF*!

It's.. it's Gone!

Bitcoin is a cruel magic trick. The Three-Card-Monte writ large.

You don't even get a piece of worthless paper to wipe your ass with.

...

At least the chromium ink won't irritate your anus.

Pumpkin's picture

Most people here are smart enough to completely oppose a cashless society. Yet there is bitcoin??  I really don't get it.

James TraffiCan't's picture

This will be bigger than the .com bubble! Remember toys.com just to name one!

Sheeple my friend Pumpkin, Sheeple!

Beam me up!

artvandalai's picture

Should be easy to catch the bad guys. After all all you have to do is look in the block in the chain where the transaction took place. Right?

zeroboris's picture

Why do people not keep their bitcoins in their own wallets?

jmc8888's picture

Many couldn't because Nicehash wouldn't let them withdraw it until it hit a certain amount, which for many was months of work to get to.

Debugas's picture

this was only possible because keeping your own wallet on your own PC is very inconvinient (you need to synch and keep updating the whole transactions ledger which is over 20GB in size) and most people simply keep it on a web site of the provider of the exchange/mining service.

this begs the question - how trusing an intermediate bitcoin provider to keep your wallet differs from trusting your ordinary bank to keep your bank account ? At least with the bank you have a treaty that your state courts will defend

jmc8888's picture

Nah, it mostly happened because the threshold to withdraw BTC earned into your own wallet is way too high, and payments infrequent.  So you have a ton of people who have been mining for months just to get to the threshold to withdraw it to their wallet.

Such a setup lets thousands of people, if not tens of thousands, having fractions of a bit coin adding up over time to a huge amount, which was just cleared.

 

Then you have the people who mine big, who had a similar amount, but it was just inbetween their weekly or bi weekly withdrawl, and/or someone who forgot to withdraw and decided to wait until the next pay period.

 

Then you have the people who simply held it there because they couldn't be bothered.

 

Then you have the people who had BTC in the till to pay the miners in coming days, weeks, months.

 

Then you have anything Nicehash itself had stored which it had collected from fees, etc.

Ron_Mexico's picture

sounds like somebody was smokin' some nice hash . . .