Bitcoin (BTC)

Bitcoins Worth $70 Million ‘Stolen’ From NiceHash, Founders Apologize

NiceHash Bitcoin Stolen

An estimated 4,736.42 BTC worth at minimum $70 million has been lost after NiceHash, the mining marketplace was hacked on Wednesday. The Slovenian company has said in an official statement. Services have now been suspended for at least the next 24 hours.

Users are now greeted with a  blank page with a statement about the hacking. The company has not provided a definite figure of the funds lost but it said it is conducting an audit. “We are working to verify the precise number of BTC taken,” the statement said.

Funds were allegedly mopped up from users’ accounts and deposited into a single address. Users started reporting empty wallets on Reddit and Twitter before an official confirmation from the company although it had announced its website was under maintenance earlier. Individual users may have lost up to hundreds of thousands of dollars, according to posts on social media platforms.

The statement from NiceHash “Our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen”. The heist is one of the biggest and raises concern about the security of online cryptocurrency marketplaces.

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,” the statement continued to say.

Users were also urged to change their passwords as a precaution. “While the full scope of what happened is not yet known, we recommend, as a precaution, that you change your online passwords.” The website offers its computing power to miners who solve complex mathematical problems to create new coins.

However, Millions worth of Ethereum were lost in November on Parity, a wallet provider after a user allegedly froze them leading to the loss of 150,000 ETH, Coindesk reported. A massive hack in 2014 spectacularly brought down Mt Gox, a Japanese exchange after 850,000 bitcoins were lost according to Wikipedia.

Nevertheless, NiceHash’s reputation is now obviously severely dented and it is not clear how it will resume services. In the recent Facebook live stream, Nicehash founders apologize and confirm the incident.

The mining marketplace provides convenience as users do not have to invest in expensive equipment. Miners in are paid a proportional percentage for every block the pool successfully delivers. NiceHash takes 3% in fees. Mining pools effectively share processing power and divide the rewards proportionately according to the effort.

They have become a necessity as mining has grown more complex and in need of much more computing power than individual users can afford. It remains unclear how the hacking with affect other mining pools around the world. However, Mining pools exist mainly in China.

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