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A major Bitcoin exchange suffered a breach this week that cost it more than $70 million in digital currency at the time of the heist and sent Bitcoin markets into a free fall.
Bitfinex, a Hong Kong Bitcoin exchange, revealed Tuesday that cyberthieves had stolen nearly 120,000 bitcoins for customers’ digital wallets, making it the second-largest theft of bitcoins in history.
“We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen,” the company said in a statement. “We are undertaking a review to determine which users have been affected by the breach.”
Bitfinex said it is also working with law enforcement to investigate the breach.
Bitcoins are digital currency created by a custom algorithm. While bitcoins can be exchanged for traditional currency, like U.S. dollars, Bitcoin is not centralized nor controlled by any government beyond a patchwork of regulations tangential to the currency itself.
A Bitfinex spokesperson told Reuters, which first reported the theft, that the exact number of bitcoins stolen from users’ online Bitfinex wallets was 119,756. At the time of the theft, those coins were worth some $72 million. Ironically, millions of dollars of that stolen wealth evaporated due to the theft itself.
After the news of the theft first hit, the price of a single bitcoin fell from about $602 to just over $531 before rebounding to around $567. At the time of this writing, what was a $72 million theft is currently worth $67 million—a current loss of $5 million.
The financial damage of the Bitfinex hack is only surpassed by the $300 million hack of the infamous Mt. Gox exchange in 2014, which killed the company.
Bitfinex’s director of community and product development, Zane Tackett, said the company is still debating how to deal with customers’ stolen money.
Andrew Couts is the former editor of Layer 8, a section dedicated to the intersection of the Internet and the state—and the gaps in between. Prior to the Daily Dot, Couts served as features editor and features writer for Digital Trends, associate editor of TheWeek.com, and associate editor at Maxim magazine. When he’s not working, Couts can be found hiking with his German shepherds or blasting around on motorcycles.