438 Bitcoins Worth Nearly $3.5 Million Stolen From Exchange In India, CSO Accused (indiatimes.com)

William Robinson shares a report from The Economic Times: Nearly 438 bitcoins, worth nearly $3.5 million, were stolen from a top exchange firm in India in what is being billed as the biggest cryptocurrency theft in the country so far. The exchange, which has over two hundred thousand users across the country, found that all the bitcoins that were stored offline had vanished. It was later found that the private keys -- the password that is kept by the company and is stored offline -- were leaked online, leading to the hack. The company tried to trace the hackers, but found that all the data logs of the affected wallets had been erased, leaving no trails about where the bitcoins were transferred. Coinsecure, a Delhi-based cryptocurrency exchange, is accusing its CSO, Amitabh Saxena, of siphoning off the money from the firm's wallet. The exchange is urging the government to seize Saxena's passport, fearing that he may leave the country.

Comments

Re:Hahaha

[PolygamousRanchKid]

Bitcoin - the joke is on its users.

Unfortunately, when Bitcoin implodes, a lot of folks who are "too big to fail" will be affected.

And so the bill will be placed on the taxpayers.

The joke will be on our tab.

Erased?

[SCVonSteroids]

Isn't this why so many people trust Bitcoin "security" to begin with? So you can trace any and all transactions back to the inception of the bitcoins used themselves?
Seems rather pointless if you can just delete any records. Sounds more like a scam every time I read something new about them.

Re:Erased?

[Zocalo]

Depends on how accurate the reporting is. BTC wallet to BTC wallet transactions will, of course, be recorded in the blockchain, but if they actually mean the logs of customer transactions between Coinsecure's user accounts and the Coinsecure wallet(s), then that's entirely different and it's quite possible that someone with the right level of access within Coinsecure could erase all the logs. The trick would be to mask the BTC leaving Coinsecure's wallets, either through tumbling or by not getting greedy and only taking enough it would not be possible to determine which BTC passing in and out of Coinsecure's wallets were stolen and which are legitimate transactions. The latter might not be too difficult if there are enough transactions and all of the internal logs are gone, but you'd probably still want to tumble the stolen coins, just to be sure.

Re:Erased?

[GeekWithAKnife]

You need to read more carefully...from the article: "The company tried to trace the hackers, but found that all the data logs of the affected wallets had been erased, leaving no trails about where the bitcoins were transferred."

It's not the blockchain record that was erased.

It's also important to understand that an exchange often has transactions on a data base & only once bitcoin is withdrawn does it register on the blockchain because all the trading happens off-chain.

As an exchange sends bitcoin to many addresses constantly it will take a great deal of time to trace it and by then the thief may have cashed out.

Of course if they managed to find the Mt. Gox hacker after so many years because it was all traced on the blockchain then stealing bitcoin and keeping it on-chain is not a very smart idea...

In summary, as far as we know; bitcoin is the only tried & tested decentralized public financial blockchain that is a currency agnostic settlement layer application and it is secure.

(Literally any other chain is so far deemed less secure, untested, private, not decentralized etc etc.)

Central storage of decentralised currency

[iTrawl]

You're supposed to keep your bitcoin in your own wallet. If you're against banks but keep your crypto at an exchange for more than the time needed to, you know, exchange it, that goes pretty much against the whole selling point. Even more, you just trust them blindly, because they're not regulated or part of an insurance scheme either.

Blackchain vs. exchange platform

[DrYak]

Isn't this why so many people trust Bitcoin "security" to begin with? So you can trace any and all transactions back to the inception of the bitcoins used themselves?

Seems rather pointless if you can just delete any records. Sounds more like a scam every time I read something new about them.

That is true on the blockchain itself, regarding exchange of BTC on the public bitcoin protocol.
You can't "delete" anything, unless the majority of the nodes on the network all agree together to roll back the blockchain. (Which happens every now or then when a newcomer cryptocurrency has a massive blunder leading to abuses and theft. Some time the whole network of that currency agree to roll back to before the blunder and use the new patched software).

But here, it's not the blockchain it self that got deletes.

There are transaction going from various owner to the wallet of the exchange platform,
there are other transaction going from the above mentioned exchange's wallet to other accounts.

But whatever happens on the exchange platform itself happens "behing closed doors" as long as the crypto-currency protocol is concerned.
An exchange platform might keep track of who exchanged which cryptocurrency with whom, so that at the end, when that user decide to withdraw their earnings, the platform knows how much to send from the platform's bitcoin wallet.
But that entirely internal book keeping.
And is completely left at how the platform feels appropriate.
For all the cryptocurrency protocols cares, it could also be a gambling platform.
Or some "artist's happenning" that completely burns and destroy bitcoins.

Here, hacker managed to get hold of the exchange platform server and persuade it to pay them out a good chunk of the BTCs held on the platform's bitcoin wallet, no matter what the server log held.