Hackers Steal $60M from NiceHash

Last month, hackers broke into NiceHash, a cryptocurrency mining marketplace, and stole all funds held in the NiceHash bitcoin wallet, in total over $60M. In online forums, users said that their balances were zero and that the amount stolen had been moved into a Bitcoin wallet on December 6, 2017. Worried users first took to Twitter and Reddit to speculate about a hack after the domain said it was down for maintenance that morning. The site was subsequently shut down for 24 hours.

Marko Kobal, then CEO of the Slovakia based company, issued an official video statement at the time confirming the hack. “Yesterday morning at about 1 a.m. a hacker or a group of hackers was able to infiltrate our systems through a compromised company computer,” Kobal said. Approximately 4,700 bitcoins were stolen from the site’s account. He added that all major bitcoin exchanges and mining sites had been notified about the breach with the goal of tracking and potentially recovering the stolen digital currency.

Kobal actually stepped down as CEO at the end of December, saying in a statement on LinkedIn, that he was leaving to “allow new management to lead the organization through its next, exciting period of growth.” The message stayed upbeat as he wished “you all the very best for the future – a future which shall see NiceHash continue in its progressive trajectory so that it becomes and remains the mining marketplace of choice for millions of users”.

According to Slovenian newspaper Delo, Kobal will be replaced by Zdravko Poljašević. Founding CTO, Matjaž Škorjanc, will stay on. Delo said that Škorjanc was “in fact the head of the entire operation. He himself got the idea and wrote a computer code for the NiceHash platform”. Ironically perhaps, Škorjanc himself was caught by the FBI (according to Škorjanc for writing software that was then used for malevolent purposes), and went to jail on hacking charges aged 22.

Škorjanc told Delo that the recent attack was “a very big blow for me, for Nicehash and for the entire crypto industry”. He went on to describe it as “one of the largest and most sophisticated hacker attacks in the crypt of all times”. When asked by Delo, if the crypts were secure, Škorjanc talked about the need when establishing a new platform to “create a security system according to military standards, which means that we will exclude the human factor from the equation”. As the hackers appear to have entered the NiceHash network using the credentials of one of its own engineers, it’s clear why Škorjanc has this trail of thought.

NiceHash has 750,000 registered users. It offers a platform for users to mine for other cryptocurrencies and get paid in bitcoin. Kobal said the site had paid out over $1B since its founding four years previously.

In a recent post on its site, NiceHash says, “We have now been able to reserve the funds required to restore balances from a group of international investors in our business” and tells users that the exact date of reimbursement for old balances will be announced by January 31, 2018.

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