Saturday, 20 October, 2018

India's Biggest Bitcoin Heist: Coinsecure Reports Theft Worth $3 Million

Since 1990-91 the construction sector added almost as many new non-farm jobs as the next four top job-generating sectors—trade miscellaneous services transport and storage and education—put together India's Biggest Bitcoin Heist: Coinsecure Reports Theft Worth $3 Million
Nellie Chapman | 14 April, 2018, 11:03

The New Delhi based exchange on April 8 lost almost 438 bitcoins worth over Rs 20 crore after most of its wallets were hacked. Customers got a nasty surprise on Thursday, when Coinsecure updated the front page of its site to inform users that 438 Bitcoin, worth an approximate Rs. 19 crores, have been siphoned off from the company.

Yesterday, the company issued a message for its users on its homepage, saying their system has never been compromised or hacked. The company has filed an FIR with the cyber cell accusing Amitabh Saxena, CSO of Coinsecure, of taking out money from the firm's wallet.

Coinsecure had recently launched Android and iOS apps and it was moving towards a multi-coin architecture. Saxena, on the other hand, claims that funds were lost in the process during the extraction of the private keys. Owing to the suspicion, CEO Kalra stated in the police complaint that Dr. Saxena "is making a false story to divert [his] attention and might have a role to play in this entire incident". The images contained a statement signed by the Coinsecure team announcing the incident, and a scanned copy of a police complaint Coinsecure CEO Mohit Kalra filed with New Delhi police. This is the first known hack instigated against the exchange, and the biggest in India so far. It was later found that the private keys - the password that is kept by the company and is stored offline - were leaked online, leading to the hack, the TOI report added. It looks like a crime committed intentionally.

Meanwhile, Coinsecure insists it will recover and reimburse customers who have seen their funds stolen. "Doc comes with an extremely strong understanding of the crypto space and has a lot of ideas and implementations that he will be bringing to Coinsecure", the exchange said at the time, pointing to his scientific research articles on the blockchain space.

The police have seized the company's servers and found that the private keys, which are never supposed to be connected to an online system, were not only online, but were there for over 12 hours.

This is happening just days after the RBI effectively banned Bitcoin trading in India, by barring regulated entities like banks from dealing with businesses or individuals who deal in virtual currencies such as Bitcoin, Ethereum, Litecoin, and so on, even though the cryptocurrencies themselves remain legal.

He added that if the bitcoin funds are not recovered, Coinsecure is willing to pay from its own pocket to compensate its customers.