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The Bitcoin price crashed yesterday after one of the digital currency’s biggest exchanges revealed it had been hacked and bitcoins stolen.
Hong Kong-based Bitfinex announced the security breach and froze all customer accounts late on Tuesday.
Bitcoin price crashes after HK crash
Bitfinex is the largest dollar-based exchange and third-largest globally behind OKCoin and BTC China, both of which are based in renminbi – according to a report in the FT.
Following the disclosure, bitcoin prices slid 20% from $604 to $482 late in the US day, marking a two-month low. By late morning in Hong Kong on Wednesday they had recovered to $539.30, according to itBit, another dollar-based exchange.
Media reports suggested some 120,000 bitcoins had been taken, but Bitfinex said it had not yet determined how many had been stolen.
The exchange added that the hack was limited to bitcoins, with other digital currencies traded on the site unaffected.
“The theft is being reported to — and we are co-operating with — law enforcement,” it said.
The hack comes weeks after US regulators warned that digital currencies such as bitcoin may pose risks to financial stability because of operators’ limited experience of working with distributed ledger systems, whose vulnerabilities might only become apparent as their use grows.
Tokyo-based Mt. Gox never reopened after it pulled down the shutters in February 2014, having lost 850,000 coins worth about $500m at the time. Investigations into the loss are continuing.
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