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Update: Bitcoin Price Plummets with Bitfinex Theft of 119,756 Bitcoins

Last Updated March 4, 2021 4:50 PM
Andrew Quentson
Last Updated March 4, 2021 4:50 PM

Update: The theft of 119,756 bitcoins, approximately $65 million at current exchange rates, has now been conclusively confirmed.

Bitcoin price crashed today as bitfinex  dramatically announced a “security breach” that led to the theft of an unconfirmed number of bitcoins. The biggest USD bitcoin exchange further announced a shutting down of its website and trading in ominous signs reminiscent of MT Gox.

We are awaiting confirmation, but circulating rumors are suggesting that an incredible 125,000 bitcoins, valued at almost $100 million, may have been hacked. The evidence provided is days destroyed. Around mid-day today, there was a dramatic dip:

If the suggested evidence is correct, this would be the largest theft in bitcoin’s space since MT Gox. We have been unable to confirm any detail as we have received no response. It is not, therefore, know how the hack may have occurred, especially on such a scale, or if the rumors and the little evidence we have are correct, considering bitfinex’s assumed use of cold wallets. Moreover, from our understanding, they use two of three multi-sig, with one key held by Bitgo. It is not, therefore, at all clear how such a staggering amount may have been stolen.

Bitfinex has, however, been experiencing numerous problems over the past few months, leading to unexpected freezing of trading on at least two occasions, both of which caused a crash in bitcoin’s price by almost $100 in each instance. The official statement at the time was that they were some problems with their data servers, and they were working hard to resolve them, but no post-mortem investigative report was published as far as we are aware.

Bitfinex was fined by CFTC  $75,000 “for offering illegal off-exchange financed retail commodity transactions and failing to register as a futures commission merchant,” in early June, but Zane Tackett, Director of Community and Product Development at Bitfinex, strongly denied any connection between previous outages and CFTC’s fine.

We’re likely to hear much more detail on this deeply shocking latest announcement from Bitfinex in the coming days and perhaps months, especially if the staggering amount is correct. For now, we urge caution as the story is evolving.

Featured image from Shutterstock. Graph from P2SH Statistics .