Credit Philippe Lopez/Agence France-Presse â Getty Images
HONG KONG â The digital currency Bitcoin plunged on Wednesday after Bitfinex, an exchange based in Hong Kong, said it had been hacked and funds stolen.
The exchange said it had halted trading, deposits and withdrawals while it investigated which users had been affected. Bitcoinâs trading value fell about 20 percent early on Wednesday, local time in Hong Kong, but had recovered about half the loss by early afternoon.
Zane Tackett, Bitfinexâs director of community and product development, did not immediately respond to requests for comment. But he said in a posting on Reddit that 119,756 Bitcoins had been stolen.
Before the hacking was made public, that number of Bitcoins would have been worth about $ 72 million. Now that the currency has slumped, the figure is closer to $ 65 million. The exchange, one of the worldâs largest, said in a blog post that any outstanding settlements would be made at the price before the hacking. âAs we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach,â Bitfinex said in the post. It added that customersâ losses would be addressed later.
Security breaches of this type have raised questions about the viability of Bitcoin. The most notable episode was the collapse in 2014 of Mt. Gox, an exchange based in Tokyo, in which hundreds of thousands of Bitcoins were stolen in a heist that experts and law enforcement officials are still trying to unravel. This past June, a hacker stole more than $ 50 million worth of Ether, another digital currency, from an experimental virtual currency project called the Decentralized Autonomous Organization.
Jack Liu, chief strategy officer at OKCoin, a large digital currency exchange, said he was not concerned about the security of his company because it uses a different system. But he noted that there should be more discussion between exchanges over best practices.
âWe care about the health of the ecosystem,â he said, although he emphasized that nobody should be dictating how Bitcoins are secured. âHackers are only getting better and so adoption of the same solution may not be the safest for the industry.â
Although some view Bitcoin as the future of finance, allowing for faster and cheaper transactions, the Bitcoin community has been rived with infighting over the development of the technology. The blockchain ledger, part of the coding that underlies the currency, has also gained more mainstream traction, as banks see an opportunity to use the technology to speed up trades.
Bitfinex said the theft had been reported to law enforcement.