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article imageBitcoin mining service NiceHash suffers $70 million theft

By Ken Hanly     Dec 8, 2017 in Technology
The cryptocurrency mining service NiceHash suffered a security breach that resulted in nearly $70 million worth of bitcoins being stolen.
The firm announced the breach on their Facebook page on Wednesday afternoon. It said it is investigating the incident and ceasing operations for 24 hours. It recommended that users change their passwords as a precaution but said "the full scope of what happened was not yet known."
NiceHash is based in the EU in Slovenia.
How much is missing?
While NiceHash said that it was still trying to determine the amount stolen, the Wall Street Journal reported that Andrei Skraba head of marketing at the company confirmed that approximately 4,700 bitcoin was missing worth about $70 million at present prices.
The money went missing from NiceHash's own bitcoin wallet. The wallet contains the public and private keys that can be used to receive or spend the bitcoins. Every piece of cryptocurrency has a private key. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency.
Skraba said the attack was professional but for now would not release any further information. He said that this would be released later after further developments.
Payments system compromised
Nice Hash said that its payments system was compromised by the incident.
In its Facebook post the company said:“We are fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity.”
What we know so far?
The heist is the 4th largest breach in the history of cryptocurrency.
Other crypto thefts appear to have had a more detrimental effect as Bitcoin was still trading at an all time high when the theft took place but there has been a huge dip since. However the price now appears to be recovering as discussed in a recent Digital Journal article.
Skrabe claims that it was quite probable that the hacker was not in the EU but declined to give any more details. Apparently it involves an IP address that is likely outside of the EU but Skrabe gave no further details except to say that NiceHash investors were from all over the world.
Finally, the hackers probably will not be able to use the money they stole. Patrick McCorry the first UK PhD graduate in cryptocurrencies at the University College in London said that the hackers will not be able to actually use their loot. Once the stolen coins are made public its difficult to spend them. Many stolen coins including coins used to pay ransoms via ransomware just stay idle and are not spent.
NiceHash has already informed other bitcoin exchanges about the stolen coins, so that they can be frozen before they are sold off.
Some think that the hack could have been an inside job as the chief technical officer at the time of the hack was Matjaz Skorjanc who had masterminded the Mariposa botnet that infected over 12 million computers. He served a jail term as a result in 2010 of 5 years and a 4,000 euro fine.
The largest bitcoin heist was the Mt. Gox affair
The largest cryptocurrency hack was in February of 2014 when hackers took $450 million from Mt. Gox a bitcoin exchange in Tokyo. At the time of the hack the exchange handled 70 percent of all transactions.
The exchange eventually went bankrupt. Much of the debacle was due to the actions and inaction of the company and its CEO as described in a Wikipedia article. CEO Karpeles was arrested by the Japanese police but on charges not related to the stolen coins.
Many bitcoin users had protested as shown in the appended photo. The reputation of bitcoin suffered but eventually recovered.
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