Coinsecure bitcoin theft: Exchange announces Rs 2 crore reward

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New Delhi-based Coinsecure, India's leading cryptocurrency exchange, said in a police complaint that it lost almost 438 bitcoins worth over $3 million after most of its wallets were hacked.

On Monday, the company's senior security officer unearthed the theft when he found that all the bitcoins that were stored offline had disappeared. As part of the announcement, the company ensured to protect users from loss personal funds. Whether the company is hacked, or an employee decides to make off with the funds, there is little that users can actually do to get their money back, beyond hoping that the company does the right thing.

Late yesterday, Indian cryptocurrency exchange Coinsecure (which now seems like an ironic name) announced that the exchange had lost of some of its bitcoins during an exercize to distribute BTG to its customers. The public address is where the funds are deposited and received. The unknown culprit has moved about 299 bitcoins through multiple transactions. At the time of this writing, there have been 973 transactions through this address and the final balance is9 BTC.

The funds lost were kept in a "cold wallet" where funds are stored offline, as opposed to a "hot wallet" which is a part of the exchange connected to the Internet. It is also being checked if more wallets have been compromised as private keys were found online.

"The hack that happened is also too good to be true". Nearly like offering the password to your bank account in a platter to a hacker.

When dealing with cryptocurrencies, a user is usually given a public address and a private key to send and receive coins or tokens. In its statement and the FIR, the company has stated that the explanation of the event by its CSO Dr. Amitabh Saxena was unsatisfactory and he should not be allowed to fly overseas until the matter gets resolved. "Connecting India to Bitcoin", the company's motto, has enabled the team to work on next-generation offerings for the cryptocurrency ecosystem in India.

Coinsecure had earlier said that it would compensate customers for losses from its existing funds.

Coinsecure was acquired in June 2014 by Delhi-based industrialist, Mohit Kalra, who joined as Chief Executive Officer.

"As the private keys are kept with Dr Amitabh Saxena, we feel that he is making a false story to divert attention and he might have a role to play in this entire incident". The exchange, further, urged to seize Saxena's passport, fearing that he might fly out of India. The episode also highlights the need for a regulatory framework for the crypto space in the country. Let us know in the comments section below.

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