Indian exchange Coinsecure blames exec for $3.5M BTC theft

Indian exchange Coinsecure blames exec for $3.5M BTC theft

"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", Coinsecure said on its website, adding that all customers who suffered losses because of the breach will be compensated from the company's funds. The company claims that almost 438 bitcoins have been siphoned off by Amitabh Saxena, its Chief Scientific Officer (CSO) - as declared on the Coinsecure's website.

Indian bitcoin exchange Coinsecure has disclosed a theft of 438 bitcoins, valued at over $3 million at press time, from its wallet in what is the country's biggest cryptocurrency theft to date.

Delhi-based Coinsecure then posted an official notification on their website updating users of the situation.

According to the TOI report, senior officers of Delhi Police's Cyber Cell confirmed the incident and said the firm, identified as Coinsecure, told them about the theft.

The letter states that the exchange was notified, on 9 April 2018, by the CSO that 438.318 bitcoins (according to CryptoCompare, worth around $3.5 million at press time) had been stolen from the firm's bitcoin wallet "due to some attack".

The company maintains that it has never been hacked or compromised and the incident took place when its CSO Dr. Amitabh Saxena was extracting BTG (Bitcoin Gold) to distribute to its customers. The company's director Mohit Kalra - who signed on the complaint - couldn't be reached on his mobile phone Friday. Owing to the suspicion, CEO Kalra stated in the police complaint that Dr. Saxena "is making a false story to divert [his] attention and might have a role to play in this entire incident". It looks like a crime committed intentionally. The company's efforts to trace the hackers was unsuccessful, since all the data logs of the affected wallets had been erased.

The FIR also asks the police to confiscate Saxena's passport, saying, "he might fly out of the country soon". But even though a user has tokens deposited into his or her address, he or she won't be able to withdraw them without the unique private key. This means Coinsecure has no idea where the bitcoins were transferred. "Irrespective of funds being recovered, we re-assure all our customers that you will be indemnified from our personal funds". In view of the issues such as money laundering, the Reserve Bank of India has directed entities (such as banks and payment gateways) regulated by the RBI to stop dealing with or providing any services to individuals or businesses indulging with virtual currencies in any form.