Bitfinex Exchange Hack Inside Or Outside Job

Bitfinex Exchange Hack

The Bitcoin community is in a huff today because yet another hack has been levied against the decentralized cryptocurrency Bitcoin. As the reports start trickling in the company does not know whether the huge hack of $70 million worth of Bitcoins was an inside job or from an outside entity. The Bitfinex Exchange Hack was significant, only Mt. Gox $449 million dollar heist was bigger, but knowing how and who did the deed is the order of the day.

Almost 120,000 bitcoin worth around $78m has been stolen from Hong Kong-based Bitfinex, one of the most popular cryptocurrency exchanges, causing a 20% drop in the value of the currency.

The hack, which is the largest of its kind and limited to bitcoin wallets held by the company, forced Bitfinex to cease trading and report the theft to law enforcement, the company said in a statement on its website.

Bitfinex said in a statement on its website: “We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach.”

Zane Tackett, director of community and product development for Bitfinex, said: “The [119,756 bitcoin] was stolen from users’ segregated wallets.”

The value of bitcoin plunged nearly 20% on the news, according to data from CoinDesk. The 120,000 bitcoin account for around 0.75% of all bitcoin in circulation.

Antony Lewis, a bitcoin expert in Singapore, said: “It’s the biggest USD exchange, so outside China it’s the one that everyone has an account with. It’s very liquid, folk can trade on margin, lots of daily volume.“

It is not yet clear whether the theft was an inside job or whether hackers were able to gain access to the system externally.

It is also unknown whether the theft will force Bitfinex into bankruptcy. A similar loss of bitcoin from the then biggest exchange MtGox forced it into bankruptcy protection in 2014 and the arrest of its chief executive Mark Karpeles in Japan.  article source

You would think that after so many hacks through the years and enormous customer losses, these digital currency exchanges would do a better job protecting their business. It is true that anyone can be hacked whether it be an inside job or an outside hacker that was able to crack a system, but maybe it might be time to look at the entire decentralized model as a whole and start asking some tough questions.

Bitfinex Exchange Hack Alternative

Everyone knows the Bitcoin crowd wants to be anonymous and do not want the Government involved in Bitcoin, yet the community is constantly barking to Government about having clear regulation criteria for the digital currency. Ironically, after the Bitfinex Exchange Hack yesterday the executives of the company immediately contacted law enforcement to investigate the alleged attack which beckons the notion this Bitcoin experiment is taking on water. The fact is that the customer is going to be the one who will be hurt most by the Bitfinex Exchange Hack, and there is no way for the company or law enforcement to recover the anonymous Bitcoin codes that were stolen.

The Bitcoin loyalist are not going to like to hear this, but there is a far better solution in my opinion and Onecoin is the clear answer. Even if Onecoin had a Bitfinex Exchange Hack of their own, the thief would have been immediately identified with the new Onecoin Blockchain that is set to start October 1st 2016. The new Onecoin Blockchain will reportedly have KYC (know your customer) information encrypted into all mined coins. So, even if someone would be dumb enough to hack Onecoin, which they most likely can’t anyway, they would not see any benefit because they would not be able to trade them or use them in any way. Just some more food for thought on having a centralized digital currency like Onecoin in this hectic thieving world.

No such luck with the Bitfinex Exchange Hack because Bitcoin does not use any technology to trace stolen coins. The filthy thieves are having one heck of a party right now on unsuspecting customers of Bitfinex.

Beam Me Up !

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