Bitcoin Forum

Bitfinex just announced they discovered a security breach in their website and halted all Bitcoin deposits and withdrawals because bitcoins were stolen.

https://steemit.com/bitcoin/@soapsadu/bitfinex-discovered-a-security-breach-and-halted-trading

What do you think?

 I think this should be in "press"

Well, everyone is vulnerable and this can happen, security is always on test. They wouldn't be the first to.have such problem.  But strange that if this happened this wasn't a bigger news.

Probably the reason why bitcoin just went down 10% to about 560$.
I did not see this one coming!!!

 It JUST happened.  The only reason it isn't news is because OP didn't post it in the "Press" section.  I guess it will be big news soon enough but that depends entirely on how much, if any they lost.

just copas from their website

Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex.

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.

The theft is being reported to—and we are co-operating with—law enforcement.

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.

We will post updates as and when appropriate on our status page (Bitfinex.statuspage.io) and on the maintenance page. We are deeply concerned about this issue and we are committing every resource to try to resolve it. We ask for the community’s patience as we unravel the causes and consequences of this breach.
Aug 2, 18:06 UTC

in bold area, is this same thing like in gox before??

I also think like that, I thin bitfinex is becoming a bigger problem for the bitcoin users, if they are unable to controll and secure their exchange then they should have to leave the way, there are a lot of other exchanges which are working better like bitstamp etc,

No. Mt.Gox attack was related to Mt. Gox's hotwallet being emptied over many
weeks/months by "transaction malleability" (Or so Karpeles has claimed). It was not
related to an individual user's wallet/address, but site's wallet.

Currently, Bitfinex is saying "some users are reporting" this, so I assume these people
were all hacked (bad pws) or downloaded keyloggers and the attacker decided to grab
everyone's btc within the exchange, at the same time.

The Bitfinex attack is reported to have been conducted today.
So previous BTC market price declines are not related (in theory).

This is my opinion based on current info, which is no real info yet, lol.

What an amazing coincidence this had with breaking out south of the consolidation 2 days prior...

Maybe. It could be the reason to the price drop and so its not ETC after all?
I guess the drop will continue still up to a week or so and ETC's price will continue to grow even more. Horray to all adopters.

We still don't know what happened exactly, if it's a hack of users' accounts or a general security breach, only time will tell, also price of bitcoin was falling for days now we don't really know if it's related to bitfinex hack or not, I think most likey not.

The rumor I heard is that BitFinex was set up such that although all BTC was held with BitGo, which apparently has reasonable cold storage practices etc., the BitFinex<->BitGo settlement setup was such that anyone with BitFinex's (hot, online) key could withdraw large amounts of money from the BitGo accounts at any time. Exactly how much could've been stolen would depend on how much BitGo allowed BitFinex to "settle" at one time, but I don't know the details of how that worked.

Sort of reminiscent of having a "cold storage wallet" that will blindly follow the instructions of the live server... (Though maybe some limits were enforced.)

I'd suspect that BitFinex is insolvent, though I definitely don't know for sure. Still, I recommend withdrawing everything as soon as possible.

theymos, you made my day by replying here haha. you are so well known in the bitcoin community.

I hope the funds that Bitfinex will not affect the market too drastically, because the news themselves will do enough for it to drop lower.

anyone know how much they lost?  cant believe this is still happening so many years after MtGox .... sad  ::)

 Oh, it's definitely Bitfinex related!  This is the same thing that happened at the end of June when Bitfinex halted trading.  Everybody gets timid and pulls back.  If the rumors are true, this one might take a little longer to recover from though.

Could be a minor Mt.Gox event. I also think that Bitfinex could face insolvency. The drop in Bitcoin price prior to the event could mean that larger amounts of funds were withdrawn/converted...
It remains to be seen, if this disaster was an inside job or a real hack. In any case, the hot wallet / cold wallet concept at Bitfinex was insufficient to prevent it from happening.

Luckily the exchanges are less monopolized today than 2011-2012. So I think the overall damage to the bitcoin exchange landscape will remain limited. That of course will only be cold comfort for the users affected...

Hopefully, the other exchanges will learn from this and constantly improve their security precautions.

ya.ya.yo!

Yeah...No. Does this look like a notable press hit to you?

---

"Some users" are out of luck, hopefully bitfinex' own stash is unaffected. Fucking hilarious.

 At least press of the day.

if they are saying "some users" then i guess this was not a backdoor hack to grab the central pot (hotwallet/cold wallet) but a frontdoor hack by getting into users profiles and withdrawing the users balances..
(logically anyway, based on what is described)

Right now it seems like a minor thing, but if this problem turns out to be much larger than they wanted us to believe, then prepare for a trip deep into the Southern regions. On the other hand, I'm not that surprised. Everytime the price seems to go up quite a bit, something happens, and the price falls back real hard. For me personally it's not really a problem as trading in a volatile market gives me the best returns, but it's another piece of bad publicity for Bitcoin exchanges in general that will most likely affect the average joe. They directly think in terms of "Bitcoin is hacked". They don't know the difference between a hacked exchange where Bitcoins are stolen, and Bitcoin as technology that got hacked. For them it's just Bitcoin that got hacked.

Previous decline could be related to stolen funds being dumped depending on when they were stolen and how much was stolen.  There is no reassuring statement about cold storage coins being safe which is somewhat disconcerting.

What are we going to call it if/when it turns out to be yet another in a loooong list of scam, or at the vary least incompetently operated exchanges?  Bitfinished?

Such a shame for shrewd traders who used Bitfinex as their only option because it is times like these when it is possible to make a fuck-load of money.  Or lose it.

On Bitcoinity it looks like Bitfinished's feed stopped at $604.  So, some time after the current plunge started.  What are the odds that an unrelated 'hack' was just discovered right when they would have been probably having some significant strains due to notable external market fluxuations?  Maybe 'external'.

https://twitter.com/maraoz/status/760590406870507526

1% of BTC gone

A bit less. 119,756 confirmed hacked: https://www.reddit.com/r/Bitcoin/comments/4vupa6/p2shinfo_shows_movement_out_of_multisig_wallets/d61oe33

Centralized exchanges have and always will be the weak point in crypto.

Time for blocknet!!

It looks like they lost roughly 120kBTC. They are claiming that not all of their customer BTC was stolen, although that is a very vague statement.

It looks like there are still roughly 1.85 million BTC left in multisig addresses, so that should give a rough maximum amount of BTC that might be remaining in their possession (although it is likely to be significantly less then this).

Does anyone have any idea as to how much BTC bitfinex was holding for their customers?

edit: from the looks of it, I would give a rough estimation that they have gross trading revenue in the amount of ~73,000BTC per year from BTC/USD trades alone. They are likely to have made additional revenues from other trading pairs, especially the ETC/ETH related trading pairs, as well as lending commissions.

From a few months there are a number of bigger issues with this exchange, due to this exchange the price of bitcoin crash a month ago and today once again because of it the price is going downward much faster and a lot of people are losing their money at their, They should have to go now as this exchange failed in performing its duty.

That's a shames. It was bound to happen soon. Let's hope they fix the breach soon.
Possibly that it why BTC is falling too.

yep!! cant trust any of these online places anymore especially the exchanges. They go after the exchanges cause they know its
the best place. Whats that old saying "why rob banks?" cause thats where the money is.  Cant leave money in these exchanges
that you dont expect you can lose

The damage is already done. People sell because of the fear of all those bitcoins landing in the selling market. They obviously will fix the breach, but the loss is so big, that they will likely not continue to offer the exchange.

They have said that they will reopen the exchange.

I would actually be surprised to see that happen. However I believe the comment you are referring to had this reply from the rep: " When i say relaunch i am referring to bringing the site back up so that people can close positions, withdraw etc."

So its not exactly coming back. Its only for withdrawals of altcoins or something like that.

There is no security breach! They are running with our coin

The strategy is kinda good tbh, they used the block halving to confuse us.

they say 2 things
1, certain customers were hacked
2. they have over 1mill bitcoins in multisigs.

my questions are.
A)who had sole control of the hacked privkey?
by this i mean that the privkeys are owned by the central holder (the exchange) not the user. it does not matter how the exchange was hacked. even if someone gained access by hacking users passwords.. the coins were not stored on addresses "owned" by users (only a sqldatabase value). the users did not have access to the private keys so the users should not be individually victimized.
legally a user could say he is not at loss due to having no ownership of the privkeys that were de-funded.

b) if they have 1mill bitcoin in multisigs. does anyone have any blockchain analysis to see how many multisigs exist and the total bitcoin holdings of multisigs to see if their "reserves proof" can be proven

And the panic effect for the bitcoin users it's will very hard to healing that. and the loss is enough to make some people feeling stressed about that. there so many loss we get from that cases. and that is just a one can make a big damage like this.

I don't think they have lost all of customer bitcoin. From what I can tell they have revenue in the amount of roughly 60% of the bitcoin losses from BTC/USD trades annually, although they do have some expenses as well. It looks like bitfinex might have another ~45kBTC in annual revenue from ETH/ETC related trading, although they have only been trading ETH for the past ~6 months, so they have possibly made 22.5kBTC in commissions via ETH. They would have needed to pay some of that to their various expenses, and the above estimates may be a bit on the high side.

Where did they say this?

According to p2sh.info (http://p2sh.info/dashboard/db/p2sh-statistics), there are roughly 1.85 million BTC held in p2sh addresses currently. I am not sure how accurate this site is, nor how trustworthy the site is though.

seems the p2sh site shows that at 09:00-12:00 UTC (uk) 110k coins moved out of p2sh addresses..

now re-reading this whole topic. i misread what was wrote. i assumed someone was saying bitfinex lost 110k coins of over 1m coins.. now i see it as someone highlighting just some stats from p2sh.. and nothing categorically suggests that its bitfinex loss/holdings..

No one saw it coming except the owner of that Bitfinex. If he did that intentionally then he fulfilled his goal in making bitcoin fall for a 100 dollars.

what do you expect when it was based in Hong-kong(where there is no difference in white & black money) for obvious reasons ?

pretty unprofessional scam i would say.

Keep an eye on the 'crypto banks' (a.k.a centralized exchanges regulating crypto's). Polo is on the way bro's.


of course after zane confirms it's their wallet/coins.