A big reward! Bitfinex will offer hackers a 25% reward to recover nearly 120000 stolen bitcoins


A big reward! Bitfinex will offer hackers a 25% reward to recover nearly 120000 stolen bitcoins
Technical editor: Xu Jiuyi from: sinao editorial department

Bitfinex, the top overseas exchange, recently issued a statement in the cryptocurrency community, hoping that they could help recover nearly 120000 bitcoins stolen by the exchange more than four years ago.

The exchange said that if it could provide them with the contact information of the hackers, they would be rewarded with 5% of the recovered property (or equivalent funds or assets based on the current market value). If the hackers return the stolen bitcoin, bitfinex will not hold them responsible, but will also provide them with 25% of the recovered assets.

Bitfinex said it was prepared to offer about $400 million in rewards to recover the bitcoins.

Review of theft

In early August 2016, hackers broke the security system of bitfinex exchange and launched 2072 unauthorized transactions, resulting in 119755 bitcoin stolen. The bitcoins were worth about $70 million at the time, but today the total value of the stolen bitcoins is close to $1.35 billion.

Recently, bitfinex said it had been cooperating with relevant law enforcement agencies since the incident. But in the past four years, less than 28 stolen bitcoins have been managed to recover.

Why come back?

As we all know, the bonus offered by the exchange is far from the current market value of the bitcoin, but why did they put forward this condition?

The reason is that with the real-time anti money laundering regulations, hackers will face great risks and difficulties when transferring these bitcoins.

According to the latest news report, a wallet address under the criminal’s name transferred about $51 million worth of bitcoin in a week, which attracted the attention and monitoring of relevant platforms. However, the number of bitcoin transferred accounted for only 1-2% of the total stolen amount.

If you want to transfer all the stolen bitcoin, it may be a very long process and face great regulatory pressure. That’s why bitfinex proposed a compromise deal.

In order to facilitate the deal, bitfinex is working with industry leaders to establish a procedural mechanism that will give hackers the opportunity to return most of the stolen funds while maintaining identity security, while retaining a certain proportion of the funds as a reward for cooperation to eventually solve the problem. However, bitfinex reserves the right to impose conditions on any transfer in order to verify the claim and ensure a safe process.

Isn’t blockchain very secure? Why can bitcoin be stolen

One of the features claimed by blockchain technology before is security. Since it is safe, why will it be stolen?

In fact, such exchange theft has little to do with the blockchain itself. Virtual currency exchange is generally a centralized exchange, that is, users can trade within the exchange after recharging to the exchange. However, the intermediate process of trading will not be linked to the security of the blockchain, which is only related to the security level of servers of different exchanges.

Under normal circumstances, customers’ virtual currency will be stored in the “cold wallet” of the exchange, that is, encrypted and saved offline, so as to ensure the security of funds with physical isolation. However, due to “systemic difficulties”, the stolen NEM tokens were kept in the “hot wallet” connected to the Internet at that time, allowing hackers to take advantage of it.

In short, the tokens that should have been stored offline were put online and stolen by hackers.

Therefore, any strong security mechanism is not absolute. Although the blockchain network can be called safe in terms of data unforgeability and tampering, it can not completely eliminate the problems of leakage, theft, fraud and data privacy leakage.

A big reward! Bitfinex will offer hackers a 25% reward to recover nearly 120000 stolen bitcoins