Bitcoin Price Impact Following Bitfinex Hack
Almost 120,000 BTC were stolen as a result of the hacking which occurred on Tuesday 2nd August 2016. At present, all services on the site are currently suspended while Investigations are currently ongoing.
With the recent hacking of Bitfinex, bitcoin price took a downward slump, down from over $600 to the current price of $577 within the past few days.
Bitfinex is one of the largest exchanges, with more than 600,000 BTC traded over the past 30-days period up till 2nd August. A breach of this extent affects the ability of market makers to be able to maintain a stable order spread, sparking a new wave of uncertainty.
Site Down, Investigations Ongoing
At present, Bitfinex has taken down their website and replaced it with the maintenance page. The exchange is currently working with the authorities while they are investigating the theft.
“While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up.
The theft is being reported to—and we are co-operating with—law enforcement.”
Users have reported loss of funds and/or of their accounts being drained earlier on, on Tuesday. The exchange has stated that they “are undertaking a review to determine which users have been affected by the breach“.
The exchange is currently working on its relaunch and is “currently in an ongoing process of restoring limited functionality in a secure environment, with full functionality coming afterwards in progressive stages”.
In its status update, the exchange further states:
To accommodate the relaunch, all withdrawals, open orders, and open funding offers will be canceled. Furthermore, in order to compute losses for relevant parties, settlement must occur in the affected accounts. Margin positions for all pairs will be settled and closed using the following prices, representing the midpoint of the bid and ask on August 2, 2016 at 18:00:00 UTC:
BTCUSD: 604.06000000
ETHUSD: 10.19050000
ETHBTC: 0.01689900
ETCUSD: 2.83700000
ETCBTC: 0.00471495
LTCUSD: 3.75180000
LTCBTC: 0.00621295
More Questions & Uncertainties
With the current breach, questions and uncertainties have been raised as to how such a breach could have happened and who is to be blamed for it.
From the use of multiple-signature wallet by provider BitGo, to the ruling made by CFTC, the event has sparked confusion and frustrations by traders and users. Others have also question as to how the movement of such a huge amount of bitcoins could have gone by unnoticed.
As investigations are underway, further updates would be made available by the exchange in due course. All updates can be viewed on Bitfinex’s status page.
