Written by Olusegun Ogundejiformer writerReviewed by Cyril Gilsonformer editorBitfinex Reports Security Breach, Bitcoin Price Slumps
MagazinePublishedAug 2, 2016
Bitfinex has discovered a security breach that requires a halt to all trading on its platform. Bitcoins belonging to some of its users are stolen.
Bitfinex reports it has discovered a security breach that requires a halt to all trading on its platform. The exchange also claims that Bitcoins belonging to some of its users are stolen.
The company states 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. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up.”
Bitcoin price drops
As a result, the price of Bitcoin slumped to as low as $560, a reversal to its price in the first week of June 2016.
However, there are insinuations that certain manipulations could have taken place.
Simon Dixon, Co-Founder BnkToTheFuture.com, Fund Manager Bitcoin Capital, tweets:
Looks like insiders were aware of @bitfinex security breach. That explains the sell off before the announcement. Some things never change. — Simon Dixon (@SimonDixonTwitt) August 2, 2016
Erik Voorhees, CEO of ShapeShift.io, argues:
@SimonDixonTwitt @bitfinex Just because a sell off happened prior to the hack, doesn’t mean they are related. U have evidence otherwise? — Erik Voorhees (@ErikVoorhees) August 2, 2016
Dixon answers:
@ErikVoorhees @bitfinex No evidence - just happens in all markets. Sudden sell off then the news. Buy the rumour, sell the fact. — Simon Dixon (@SimonDixonTwitt) August 2, 2016
Bitfinex also states:
“As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach. Any settlements will be at the current market prices as of 18:00 UTC. We are taking this necessary accounting step to normalize account balances with the objective of resuming operations. We will look at various options to address customer losses later in the investigation. While we are halting all operations at this time, we can confirm that the breach was limited to bitcoin wallets; the other digital tokens traded on Bitfinex are unaffected.”
Bitfinex had to halt all trading on its platform in June due to server issues.
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