India's biggest crypto theft: Bitcoin worth Rs 19 crore stolen from Coinsecure

In what could be one of the biggest cases of cryptocurrency theft in India, around 438.318 bitcoins worth over Rs 19 crore were siphoned off from bitcoin exchange Coinsecure.

The bitcoin exchange has lodged an FIR with Delhi Cyber Cell. A case was registered under IPC sections and Section 66 of the IT Act.

According to a company's FIR report, CSO of Coinsecure, Amitabh Saxena, is accused of playing role in this theft as private keys are kept with him. The exchange, further, urged to seize Saxena's passport, fearing that he might fly out of India.

“We regret to inform you that our bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control. Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract bitcoins to distribute to our customers,” Coinsecure posted about the hack in a statement on its site.

Coinsecure claimed to have over two lakh users across the country. Coinsecure CEO Mohit Kalra, who contacted specialists to find out the source of the hack and trace the bitcoins, reportedly said that the company will pay from its own pocket to compensate its customers.

The exchange servers have been seized by the cybersecurity officials. It is also being checked if more wallets have been compromised as private keys were found online.

Founded in July 2014 by Mohit Kalra and Benson Samuel, Coinsecure launched its bitcoin exchange for the domestic market on January 1, 2015. Coinsecure offers an algorithmic trading bitcoin exchange where users can buy and sell bitcoins for actual money at a fee of 0.3 per cent of the amount bought or exchanged.

Earlier, Coinsecure had raised $1.2 million investment round. The firm start-up had also received a seed round of $3,00,000 from angel investor Sanjeev Kalra in 2015.

Bitcoin hacking cases

This is not the first incident of hacking involving bitcoin. In July last year, a Bengaluru-based data scientist’s Bitcoin account on Unocoin was hacked, and he lost Rs 1.2 lakh.

In August, many users had reported unauthorised transfers of 0.25 BTC from their Unocoin accounts. Unocoin, which claims to have more than 150,000 users, had gone offline after it discovered a security vulnerability on its servers.

In the first week of this month, Scamster Amit Bhardwaj was arrested from Bangkok. Bhardwaj is facing scam charges worth $300 million (approx Rs 2,000 crore) attached to his company GainBitcoin.

Outside India, South Korean Bitcoin and Ether exchange Bithumb, one of the largest exchanges in the world, got hacked resulting in loss of more than $1 million in cryptocurrencies.

NiceHash, a cryptocurrency mining market, had become a victim of hackers, who wiped out its Bitcoin wallet causing loss of over $60 million.

Indian government and the Reserve Bank of India (RBI) have, time and again, cautioned the users, holders, and traders of Bitcoins about the security-related risks associated with dealing with such virtual currencies (VCs). A committee set up by the Finance Ministry had reportedly recommended banning cryptocurrencies over fears that they could be used to launder money and perpetuate frauds.