Largest Crypto-Mining Exchange Confirms It Was Hacked, $62 Million In Bitcoin Stolen

Tyler Durden's picture

Update: as @MillionsBitcoin points out....

... the total amount of bitcoins stolen from Nice Hash is 4736, or just over $62 million, and they have ended up at the following address:

* * *

Earlier

As Bitcoin explodes higher on what now appears to be constant demand out of South Korea, there were unconfirmed (at least until recently) reports that Nice Hash, the largest crypto-mining marketplace, has been hacked with over 4,000 bitcoins worth over $50 million stolen.

Visits to the website over the past 13 hours were greeted with the following maintenance notice.

According to TweakTown, there are some posts by people saying that NiceHash transferred all of the BTC sitting in miners' wallets into a single wallet before NH fully went down.

If NiceHash were hacked, then it makes sense that the hacker pushed all of the Bitcoin into a single wallet and then transferred it to their own wallet. There's no way of getting it back if that's the case, and if that is indeed the case, there's no way NiceHash can restore money to miners' wallets. If we're talking about $50 million or more, it's going to hurt, bad.  

Earlier, WklTribune reported that they've been in contact with NiceHash CEO Andrej Nabergoj, who said that NiceHash is "assessing the situation and working with the authorities. We'll have a public statement shortly".

And then, moments ago NiceCash confirming there was a security breach:

From the release:

Unfortunately, there has been a security breach involving NiceHash website. We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours.

 

Importantly, our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen. We are working to verify the precise number of BTC taken.

 

Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days. In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency.

 

We are fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity.

 

We would not exist without our devoted buyers and miners all around the globe. We understand that you will have a lot of questions, and we ask for patience and understanding while we investigate the causes and find the appropriate solutions for the future of the service. We will endeavour to update you at regular intervals.

And the best part:

While the full scope of what happened is not yet known, we recommend, as a precaution, that you change your online passwords. We are truly sorry for any inconvenience that this may have caused and are committing every resource towards solving this issue as soon as possible.

One wonders: if one has just had millions in bitcoin stolen, will changing the password really help?

So far Bitcoin has taken the massive hack well, and continues to rise, approaching $13,500.

The news could be negative - at least in the short-term - for companies catering to "home miners" such as Nvidia, the biggest beneficiary of the bitcoin mining euphoria.

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Cognitive Dissonance's picture

Don’t worry. They’ll just print up some more Bitcoins to replace the stolen ones.

cossack55's picture

What size truck does one need to haul off $50M in BTC?

1835jackson's picture

That's a good one! 

 

People go mad in herds and recover their senses one by one.

Raffie's picture

or Ledger... got Nano S.

Still waiting on a price on this one - https://asicvault.io/#header

YUNOSELL's picture

Someone also hacked my gold.....

 

.... and now the gold bar has quite a dent on its top.

BaBaBouy's picture

This Is Fucking Like The WHILD WHEST ~

JRobby's picture

Oh?

Assume it keeps going up anyway

Pinto Currency's picture

All units be on the lookout for stolen units of um coding.

cpnscarlet's picture

Car 119! Car 119! Investigate suspicious characters leaving Best Buy with a suitcase full of electrons....

Luc X. Ifer's picture

Well, Ethereum is in free fall collapsing - completly oposite to the reference BTC and other top alts. Warning and advice - get out of it's shit ASAP

https://www.worldcoinindex.com/coin/ethereum

The 1st real life application deployed on the Ethereum Blockchain managed to almost collapse it and now the proof is in that the for long mentioned scalability issues are for real and not only hate.

https://techcrunch.com/2017/12/03/people-have-spent-over-1m-buying-virtu...

[The game is run via a set of 5 Ethereum smart contracts written by AxiomZen, and users interact with it via their own Ethereum address. Right now the easiest way to do that is by using the Chrome extension MetaMask which gives you the ability to send and receive Ethereum directly in your browser. You then would navigate to the CryptoKitties site which is essentially an interface to interact with their smart contracts so you can buy sell and breed kittens.

Right now about 15% of all Ethereum network traffic is dedicated to the game, making it the most popular smart contract on the network. For reference, number two with about 8% of network transactions is EtherDelta, the popular decentralized token exchange.

This traffic is making it hard to play CryptoKitties, and a lot of transactions (like buying and selling cats) are taking longer than usual to process and needing multiple attempts.

Due to network congestion, we are increasing the birthing fee from 0.001 ETH to 0.002 ETH. This will ensure your kittens are born on time! The extra is needed to incentivize miners to add birthing txs to the chain. Long-term solution will be explored very soon!

— CryptoKitties (@CryptoKitties) December 3, 2017

Not only is this making it hard to play the game, but this scaling issue is a real concern for the Ethereum network in general. If one viral game that hasn’t even spread beyond the tech world can slow down the network, what happens when the blockchain expands to real world applications?]

Luc X. Ifer's picture

The Next CryptoKitties? The Blockchain Might Not Be Ready

[But the insanely viral trading game running on ethereum was most often cited, not as a success, but as an example of industry challenges. As put forward by developers and entrepreneurs, the world's second-largest blockchain just isn't ready to handle the buying, trading and mating of the crypto felines en masse.

As the panels proved, though, the problem is bigger than ethereum and CryptoKitties alone.

Scaling issues also influenced Earn.com's decision to create a token this year, and onstage, CEO Balaji Srinivasan spoke to a "philosophical split" in approaches to bitcoin that led to the decision.

Brian Hoffman, CEO of OB1, the startup that manages the e-commerce platform OpenBazaar, struck a similar chord in a talk in which he announced his company's plans to launch a token that will be used in conjunction with bitcoin.]

https://www.coindesk.com/token-summit-scaling-cryptokitties/

ufos8mycow's picture

They'll have to revise the theft report tomorrow to $62 Billion

shitshitshit's picture

nicehash is a shitty meta pool and this robbery is meaningless in the grand scheme of things.

However: this bears uncanny similarities with the beginning of the gox bear market when coins started disappearing left and right. And given we're in full parabolic mode I can only guess the market is becoming quite unstable and ready to implode soon.

As was highlighted a few days ago, one of the biggest risks (I enumerated a few of these) was the lack of security of wallets because of computers they are sitting on (not everyone uses a cold wallet and has the discipline to do so). Main risks here are bitrot and security issues.

So at some point we will rediscover the virtues of banking, because bitcoin wallets become a place where we increasingly need rigorous asset management practices. Therefore brace yourself for the time when banks will start offering secure bitcoin wallets. This will be the start of a new offering that may very well make a lot of sense.

 

 

BallAndChained's picture

> CryptoKitties

Bitcon and all the cryptos are just online games.

The gold pieces of MMO games are a lot more efficiently run than the hugely inefficient, power hungry, network congested decentralized games like Bitcon.

 

Justin Case's picture

Deputy Barney Fife is already on it.

Phil Free's picture

Him, and Rosco P. Coltrane!

 

hedgeless_horseman's picture

 

Coinbase site down also

Coinbase site is up.

GDAX is up and running.

Bitcoin is up 14% since yesterday.

Escrava Isaura's picture

Stolen?

I go one step further:

Everyone trading BitCON could die of aids tomorrow and the general population wouldn’t even notice.

How many BitCON is worth $50 million dollars?

Zero, because you price it in dollars.

 

E5's picture

Obama murdered a teenager and no one noticed.  Brazil released a bioweapon on it's own population through engineered mosquitos and none of those stupid people noticed either.

PT's picture

I really miss the reporting of old-fashioned bank robberies.

"Thieves broke in through a sky-light, disabled the alarms, rapelled down into the office of the bank manager who was working late that night, threatened to kill him and his family unless he opened the safe, bound and gagged him, stole all the money and drove away.  Staff found the bank manager still bound and gagged the next day when they came into work.  Police have found an abandoned transit van burnt out and in a ditch and believe it has some connection to the robbery ..."

Bitcoin thefts today?

"Bitcoin gone.  Hackers."

PT's picture

Hackers?  Doesn't Windows 10 have a built in keylogger?  Is that the problem?

I haven't read the code so I don't know how bitcoin "security" works.  I assumed they must be able to do something because what about credit cards?  That technology appears to be secure so what do CCs have that Bitcoin doesn't?  And vice versa.

Lockesmith's picture

Inaccurate. Bitcoin scrip was stolen. People using cold wallets had nothing stolen from them.

ThePhantom's picture

last two times i tried to make a purchase ... coinbase goes down. maybe its me.

JethroBodien's picture

Security proof.  Right.  LOL

Gaius Frakkin' Baltar's picture

Why would anyone steal Bitcoin? It doesn't have any value. A Gold plated Tungsten hoarder told me so.

tmosley's picture

Was the tungsten gold plated, or was the hoarder?

PT's picture

This would be an ideal time for you to explain to the plebs HOW the Bitcoin was stolen and what should have been done to prevent the theft.  We now assume that you don't know either.

Gold is easy.  Sink canoe in deep lake.  Don't tell anyone.  Try to not let your loved ones get kidnapped.

Bitcoin?  Keep great big number hidden and off the net.  Don't tell anyone.  Try to not let your loved ones get kidnapped.  What about when you finally want to transact with it?  How do you make sure it doesn't get stolen in what you thought was a legit transaction?  How do you make sure that whatever just happened in this story doesn't happen?

Ajax-1's picture

I guess the "NiceHash" isn't so nice after all.

Ranger4564's picture

Hehe, I just posted the same video link. I'll leave mine, It's a higher quality.

BallAndChained's picture

> Why is my nicehash wallet zero? I checked the transactions on a 3rd party website and my balance was zeroed out.

BUT BUT I was told Bitcon was a safe store of value????

 

ReturnOfDaMac's picture

Thats gonna leave a mark.  Screw BTC mining, maybe one should consider exchange hacking?

tmosley's picture

If you don't hold your private keys, you don't own it.

NoDebt's picture

NiceHash went down the drain owing me $25.  I did regular sweeps into my offline wallet so no biggie for me.  You want a good laugh?  Go read their Facebook page right now.  Holy shit!

They are DONE, obviously.  They will never recover from this, nor will any of the miners owed money by them ever get a penny of what they're owed.

They used ONE FUCKING ONLINE WALLET for their entire Accounts Payable, apparently.  ONE!  With $58MM worth of Bitcoin in it!!  In a dog-eat-dog world, they were wearing Milkbone underwear.

Oh well, on to the next.  I have some hungry 1060 graphics cards ready to hash more crypto for somebody (highest bidder).

 

Sanity Bear's picture

and perhaps another instance of "the easiest way to rob a bitcoin exchange is to own it"

kochevnik's picture

Unfortunately many online miners have some incident and everything disappears.  Best to remove original principal as quickly as possible so only mined coins reinvested, and original investment safe.  Also with altcoins growing so fast, 300% return not so amazing.  But it is 300% return in your coin, which could be much greater compared to fiat.  Still year commitment to online company is generally risky.  Company with close relations to mining hardware manufacturer may be safer

Twox2's picture

Maybe dumb like a fox. Inside job? One wallet would make it easier...

NoDebt's picture

That thought has crossed a lot of minds simultaneously today.

 

Righttoarmbears's picture

GTX1070's work lovely, 8gb of on-board ram and 1,920 core.