Cryptocurrency has become a hot topic around the globe. However, it is still a relatively new phenomenon and is becoming an attractive target for thieves. The main reason for this is that these currencies are stored in digital wallets. And digital wallets are not necessarily secure, so hackers find ways to gain access to them and withdraw money from the system.
What is a Cryptocurrency hack?
Cryptocurrency hacking equals stealing cryptocurrencies. This feat is accomplished via phishing schemes to lure unsuspecting coin owners to a phony coin exchange. Once there, hackers may steal your login credentials or install keyloggers on your devices to obtain them.
What is the Bitfinex hack?
Bitfinex is a crypto trading platform that allows users to trade using USD and other fiat currencies to buy and sell cryptocurrencies like Bitcoin, Ethereum, Zcash, Ripple, and Litecoin.
In 2016, a series of hacks plagued the Bitfinex Bitcoin exchange. These hacks led to a loss of $ 72 million in Bitcoin and another $ 48 million stolen from the exchange’s users. This makes the Bitfinex hack one of the largest Bitcoin hacks in history.
What Happened?
On August 2, 2016, an anonymous hacker (or group of hackers) took advantage of a loophole in Bitfinex’s security systems to drain customer accounts by hacking into their security systems. The hacker (s) performed a complex multi-stage attack that involved stealing the platform’s private keys to their wallets and then transferring 120,000 BTC (worth upwards of $ 72 million at the time) out of customer accounts over several days.
The hackers also stole another 48 million USD worth of other cryptocurrencies such as Litecoin and Ether, as well as 11% of all Bitfinex customer deposits held in a separate account.
What is happening now?
The hackers transferred a huge chunk of the BTC stolen from the Bitfinex cryptocurrency exchange in 2016 to an anonymous wallet on Tuesday, February 1, 2022.
According to Twitter account Whale Alert, the hackers moved approx. 10,000 worth of BTC value at over $383 million to an unknown wallet during the Asian peak market hours.
The total value of the 10,000 BTC transferred is $383,060,670. This accounts for about 8% of the 119,756 BTC from the total of 119,756 Bitcoin stolen from the exchange in 2016. This incidence ranks among one of the largest crypto heists in history.
What does this mean for Bitcoin price and Bitfinex users?
As it is, the $ 380 million worth of Bitcoin stolen during the Bitfinex hack is on the move. While there is no exact explanation why this is happening right now, it is important to remember that all stolen Bitcoin from Bitfinex is closely monitored.
The good news for Bitfinex users is that their stolen funds are well-protected and cannot be moved by the hackers. So far, all stolen funds have been tracked and accounted for, which means that they can only move the funds when law enforcement lets them do so.
While it is unclear why the hackers move coins, one thing to keep in mind is that it will be incredibly difficult to convert those coins into cash. This also means that we should not expect an influx of Bitcoins on any exchange right now. However, if this keeps happening, we might see an increase in Bitcoin price as the supply on exchanges reduces.