Bitcoins worth $94M stolen in hack on Bitfinex exchange

Nearly 120,000 units of digitalcurrency bitcoin worth about $94million ($72 million US)werestolen from theexchange platform Bitfinex in Hong Kong, making it thesecond-biggest security breach ever of such an exchange.

Bitfinex is one of the largest exchanges for bitcoin, and isknown in the digital currency community for having a platformthat has deep liquidity in the U.S. dollar/bitcoin currencypair.

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ZaneTackett, Director of Community & Product DevelopmentforBitfinex, told Reuters on Wednesday that 119,756bitcoinhadbeen stolen from users' accounts and that the exchange had notyet decided how to address customer losses.

"Thebitcoinwas stolen from users' segregated wallets," hesaid.

Bitcoinplunged just over 23 per cent on Tuesday after thenews broke. On Wednesday it was up 1 per cent at $545.20 USon theBitStampplatform.

Tackettadded that the breach did not "expose any weaknessesin the security of ablockchain", the technology that generatesand processesbitcoin, a web-based "cryptocurrency" that canmove across the globe anonymously without the need for a centralauthority.

0.75% of bitcoin in circulation

The volume stolen amounts to about 0.75 per cent of allbitcoinin circulation.

"It's the biggest USD exchange, so outside China it's theone that everyone has an account with," said Antony Lewis, abitcoinexpert in Singapore. "It's very liquid, folk can tradeon margin, lots of daily volume."

It is not yet clear whether the theft was an inside job orwhether hackers were able to gain access to the systemexternally.

Bitfinexsuspended trading on Tuesday after it discoveredthe breach. It said on itswebsitethat it was investigating andcooperating with the authorities.

The attack onBitfinexwas reminiscent of a similar butlarger breach atMtGox, a Tokyo-basedbitcoinexchange that wasforced to file for bankruptcy in early 2014 after hackers stolean estimated $850 million ($650 million US) worth of customers'bitcoins.