Reports are emerging of Chinese Bitcoin exchange 796 mistakenly losing 1000BTC of customer funds in a botched customer service request.
According to the explanation, hackers had compromised areas of the exchange in the previous days, which had caused a user “to mention the current address has been tampered with, coupled with hackers deliberately [using] a similar address with the original withdrawals address to confuse users…”
The note additionally states that the problem has been contained and that additional security measures are in place. No mention of further losses has been made.
796 is the latest casualty of ongoing attacks on exchanges which have persisted despite market maturation and advances in industry security standards. Its losses however are far below those incurred by other outfits, with Bitstamp’s 19,000BTC still fresh in the minds of many wary traders.
796 CEO, Nelson Yu, had previously told Cointelegraph that “in terms of our trading volume and liquidity of Bitcoin futures, we are the world’s biggest exchange,” with the service being called “the world’s most liquid futures and options exchange for Bitcoin and Litecoin.”
Cointelegraph will continue to monitor and bring you updates on this story as it develops.
[UPDATE: 796 has provided us with comments on the hack, they can be found below. The original chinese language statement from the company and its Google Translation have been removed for ease of reading, but can still be accessed through this link.]
Nelson Yu, President of Americas Division, 796, gave the following comment to Cointelegraph:
"We have been constantly monitoring the hacking activities on our servers and 3 months back then we took the precautionary step to migrate our servers to a highly secured cloud site. Unfortunately, that didn’t stop the incident from happening last night. In the last 24 hours, our security team worked around the clock to trace back the codes and processes. At this moment, we have a pretty good idea of exactly how they did it. This was not a generalized attack. The hacker’s strategy was precisely calculated and well targeted to compromise a certain weakness on our server.
Anyways, I would like to emphasize that 796 intents to keep our business as transparent as possible to our customers and shareholders. You can always find the public addresses of our wallets and our monthly revenue numbers on our website. If you do the math, you can always keep track of how our business is going. This spirit goes to all levels in our organization. Once the loss was verified, our CEO, Zhu Rong, posted an announcement on his Weibo at his soonest possible time. This is how we commit to our customers and we make sure this will continue as long as our organization exists.
Precisely speaking, the wallet system is not affected at all in this event. The theft happened during the transaction of the fund. That’s where the hacker attacked.
Due to this nature, major shareholders have carried out their obligation to our customers in covering this loss of fund. The remedy came from the major shareholders’ unpaid dividend."
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