$68M in bitcoin stolen in hack of NiceHash mining marketplace

Bitcoin mining marketplace NiceHash has been hacked as a large sum believed to amount to $68 million in bitcoin was stolen from the site.

The news was confirmed by NiceHash after the service went offline claiming to be undergoing maintenance. While not providing much in the way of details, the company did say in a statement that there had been “a security breach involving NiceHash website” and that it’s “currently investigating the nature of the incident and, as a result… are stopping all operations for the next 24 hours.”

The kicker comes in the next paragraph, where the company wrote that “importantly, our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen.” While adding that it’s working to “verify the precise number of BTC taken,” Coindesk noted that a wallet address tied to the company previously held 4,736.42 bitcoin. That was worth around $62 million at the time the theft took place, but with bitcoin’s continued rise in price, it’s now worth $68 million.

Founded in 2014, NiceHash operates as a marketplace that matches those with spare computing power with those looking to mine cryptocurrencies, including bitcoin. The amounts mined are held in trust by NiceHash and the company takes a cut of the transaction. Users then can transfer bitcoin or other cryptocurrencies earned via the service to their own wallets. However, not all users of the service do transfer their funds to their own wallets, which is why the company was sitting on a large stash of bitcoin to begin with.

The company added that it was “fully committed to restoring the NiceHash service with the highest security measures at the earliest opportunity.” But having experienced such a significant blow, how it will manage to return to trading without the ability to provide funds to those using its service is not clear at this point.

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Although not the same sort of the business, one possible model NiceHash could explore is issuing tokens tied to either the stolen bitcoin or equity in the company that can be traded and later cashed in should the funds be recovered. This was the path taken by bitcoin coin exchange Bitfinex after it was hacked in August 2016. The company subsequently issued tradable equity-tied tokens to customers affected by the hack as compensation for their loss.

Image: NiceHash

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