Money & Banking

Bitcoins worth Rs 19 cr stolen: Coinsecure

BL Internet Desk | Updated on April 14, 2018 Published on April 13, 2018

The RBI has been cautioning investors against cryptocurrencies ever since they entered the Indian market as early as 2013.   -  Reuters

Cryptocurrency exchange Coinsecure, which has over 200,000 users, has said bitcoins worth Rs 19 crore has been stolen from it. 

In an FIR filed with the Cyber Cell, Delhi, the company has held its CSO, Amitabh Saxena, responsible for the loss of 438.318 bitcoins (worth about Rs 19 crore) as the private keys for the bitcoin wallet are kept with Saxena.

According to the statement, Saxena had informed the company on April 9, 2018, that the bitcoins were stolen from the company's wallet in an attack.

Coinsecure, run by Delhi-based Secure Bitcoin Traders Pvt Ltd, said on Thursday: "Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract BTG to distribute to our customers. Our CSO, Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys."

Coinsecure said it would compensate customers for losses from its existing funds. It added that it was working to restore services and recover the lost funds.

 

 

Coinsecure's FIR (PDF)

 

 

 

The theft, the biggest reported so far in the country's fledgling virtual currency market,  is expected to further weaken trade in cryptocurrencies, which the government has likened to “Ponzi schemes” that offer unusually high returns to early investors.

Legal experts said there was a need to regulate the virtual currency market, instead of imposing restrictions on its trade.

“It is for reasons like these that there is a need to regulate crypto-exchanges,” said Anirudh Rastogi, founder and managing partner at TRA Law, a firm that specialises in emerging-technology businesses.

“Pushing the exchange business out from the formal economy to the informal cash economy to operate under the radar will worsen the problem, not solve it,” Rastogi said.

Bitcoins in India were trading at Rs 4,80,000, or about $7,359 on Friday, according to cryptocurrency exchange Coinome, well below its international market price of about $7,771.

Elsewhere in Asia, Vietnam and South Korea have also suffered millions of dollars worth of fraud and embezzlement in some of the cryptocurrency businesses. Earlier this year, one of Japans cryptocurrency exchanges was hit by a daring $530 million theft of digital money.

(With inputs from Reuters)

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Published on April 13, 2018
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