How Crypto-Mining Website NiceHash Lost $58 Million in Bitcoins

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NiceHash
NiceHash CEO and Co-Founder, Marko Kobal (left) and CTO, Sasa Coh (right)
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On the 6th of December, miners woke up to the news that NiceHash, a company that lets users apply their extra GPUs to mining cryptocurrencies had been hacked and a total of 4,700 Bitcoins, valued at about $58 million at that time, stolen from users’ wallets. The hack caused NiceHash to close shop for 24 hours since their payments system had been compromised. NiceHash has around 250,000 miners and the company has made payouts totaling to $1 billion since its inception in 2014. According to NiceHash, this success is what drew attention to the company.

On December 7, NiceHash CEO and Co-Founder, Marko Kobal and CTO, Sasa Coh addressed NiceHash users via a livestream on Facebook and apologized for the hack and also gave updates on what the progress of the investigations. “We are ready to fight back, but we need your support… Law enforcement and cybercrime experts have been called in to investigate the matter, said Marko Kobal in the livestream. “Given the complexity and security of the systems in place, this appears to be an incredibly sophisticated and highly coordinated attack,” he added.

Marko Kobal said they have notified all major exchanges and mining pools about the breach to help them track the stolen funds. NiceHash is also looking to bring its service back online and Marko said that its team is working “non-stop as we really want you to start mining again.”

The Company’s co-founder also revealed the timeline of events that were obtained through VPN logs:

  • 1.18am – Hack starts. There was a failed login attempt from an IP outside Europe
  • 1.37am – Successful login using one of NiceHash’s engineer’s credentials
  • About an hour from the login – Hackers learnt and simulated the workings of NiceHash’s payment system
  • 3:24am – First round of transaction began

NiceHash did not reveal any further details citing the sensitivity of the matter and that investigations were on going. Marko Kobal, however, said that he would share more in the comimg days.

 

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