Bitcoin exchange Bitfinex has been hacked, resulting in a loss of almost 120,000 BTC. Here are the cryptocurrency highlights of week 31:
- Bitcoin exchange Bitfinex, which has a pretty poor history of security breaches, has been hacked again. This time the platform has managed to lose almost 120,000 Bitcoin, worth around $70 million. This amount instantly makes it one of the biggest heists in Bitcoin’s history, as it amounts to 18% of the money stolen (650,000 Bitcoins) from defunct exchange Mt.Gox. The hack is remarkable since Bitfinex had set up multi-signature protection with its partner BitGo. The exchange was quite confident about this at the time, stating “The era of commingling customer bitcoin and all of the associated security exposures is over.” Clearly this wasn’t the case, and Bitfinex is now looking into the option of “socializing” its losses. The latter would mean what users would share losses equally.
- Transaction monitoring on Bitcoin has received yet another big boost as analytics firm LexisNexis Risk Solutions has integrated its anti-money laundering data into fintech startup Elliptic’s Bitcoin transaction monitoring and compliance products. The partnership is intended to help exposing “money launderers, human traffickers, terrorists, and drug dealers who use bitcoin to make dark web purchases”. Just last week the European Union proposed creating a central database for Bitcoin and virtual currency users’ identities and wallet addresses, accessible to government financial intelligence units. With initiatives such as this the end of Bitcoin’s pseudonymity may be near.
- Microsoft keeps making it easier for developers to get blockchain lab environments up-and-running, as its Blockchain-as-a-Service (BaaS) offering is now available to all users of Microsoft’s Azure testing environment (DevTest Labs). “Labs” may be created to experiment with private, permissioned, public or consortium blockchains, and may include MultiChain, Eris, Ethereum and Storj.
- Bitcoin experienced the biggest drop in its difficulty since January 2015 this week, after a sudden decrease in the total network computation power in the previous week, dropping by more than 5 percent in the latest difficulty adjustment. Both extreme weather conditions around the globe, as well as BitFury endings its tests with its new containerized data centers, were mentioned as possible causes for this. The fact that the hashrate has already recovered to its previous highs provides some evidence for the former, with the difficulty now on route to experiencing the biggest increase in the past half year.
- The Bitfinex hack caused a lot of pain to Bitcoin’s price, which dropped by around 11 percent this week to about $585 per BTC. At the lowest point the price even touched below the $500 per coin line, making it one of the worst weeks for Bitcoin this year. Ethereum had an equally rough week, plagued by the success of Ethereum Classic the price dropped by more than 14 percent to $10.80 per ETH. Ethereum Classic on the other hand more than doubled in value, taking the price to roughly $2.70 per ETC.