Bitcoin drops more than 10% after security breach

The price of bitcoin has fallen sharply.Image copyright
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Nearly 120,000 bitcoin were stolen from Bitfinex

The price of bitcoin has fallen more than 10% after the Hong Kong-based digital currency exchange Bitfinex said it had suffered a major hack.

The security breach led to the possible theft of bitcoin worth $65m (£49m).

Bitfinex told the Reuters news agency on Wednesday that nearly 120,000 bitcoin were stolen from its exchange platform.

All transactions on the virtual exchange have been suspended while the security breach is investigated.

In a statement on its website, Bitfinex said that it was “deeply concerned about the issue and we are committing every resource to try to resolve it”.

The hack is one of the biggest thefts in bitcoin’s history and is being treated as a “major deal” by many in the virtual currency community.

“Unfortunately, we continue to have vulnerabilities in the form of exchanges and wallets,” former Singapore-based bitcoin broker David Moskowitz told the BBC.

“The vulnerabilities almost always occur on the exchange or wallet side and this is an area that continues to need improvement and more secure protocols, no different than when a bank gets robbed.”

Securing bitcoin trading platforms has been a key challenge, with hacking and thefts seen as the biggest threats.

In 2014, the Tokyo-based Mt Gox trading exchange declared bankruptcy when hundreds of millions of dollars in bitcoins vanished or were stolen.

But Mr Moskowitz stressed that in spite of the latest alleged theft “the core protocol is extremely robust and has not been hacked”.

He said while there would most likely be a price correction in bitcoin, he remained confident that it would continue to be an appealing alternative asset.



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