Abu Dhabi, UAEMonday 16 September 2019

Red hot bitcoin scorches past $15,000 but hacking concerns surface

NiceHash, a company that mines bitcoins on behalf of customers, says it is investigating a potential theft of bitcoin worth $70m

The price of one bitcoin passed $15,000 but there are fears hackers may have stolen $70m worth. Dan Kitwood/Getty
The price of one bitcoin passed $15,000 but there are fears hackers may have stolen $70m worth. Dan Kitwood/Getty

The frenzy surrounding bitcoin ramped up further Thursday as the virtual currency soared above US$15,000 for the first time, just days before it starts trading on major US exchanges.

At the same time, there are fresh concerns about the security of bitcoin and other virtual currencies after NiceHash, a company that mines bitcoins on behalf of customers, said it is investigating a breach that may have resulted in the theft of bitcoin valued at about $70 million.

Research company Coindesk said that a wallet address referred to by NiceHash users indicates that about 4,700 bitcoins had been stolen. NiceHash said it will stop operating for 24 hours while it verifies how many bitcoins were taken. Wallet is a nickname for an online account.

There was no immediate response from NiceHash to requests for more details.


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"The incident has been reported to the relevant authorities and law enforcement and we are cooperating with them as a matter of urgency," it said. The statement urged users to change their online passwords.

Slovenian police are investigating the case together with authorities in other states, spokesman Bostjan Lindav said, without providing details.

The hack occurred just as the trading community prepares for bitcoin to start trading on two established US exchanges. Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on crosstown rival CME Group's platforms later in the month.

That has increased the sense among some investors that bitcoin is gaining in mainstream legitimacy after several countries, like China, tried to stifle the virtual currency.

The price of bitcoin has jumped in the past year, particularly so in recent weeks. On Thursday it surged to over $15,000, up $1,300 in less than a day, according to Coindesk. At the start of the year, one bitcoin was worth less than $1,000.

bitcoin is the world's most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.

Miners of bitcoins and other virtual currencies help keep the systems honest by having their computers keep a global running tally of transactions. That prevents cheaters from spending the same digital coin twice.

Online security is a vital concern for such dealings.

In Japan, following the failure of a bitcoinexchange called Mt. Gox, new laws were enacted to regulate bitcoin and other virtual currencies. Mt. Gox shut down in February 2014, saying it lost about 850,000 bitcoins, possibly to hackers.

Updated: December 7, 2017 07:42 PM