19 Cr INR ($ 3 Mn) worth of BTC alleged to be stolen from Major Indian exchange

Coinsecure, one of the oldest crypto exchanges in India has been compromised of Bitcoin worth Rs.19 crores (around $3 million) as announced in their homepage. They have filed a complaint with the Cyber Cell branch in New Delhi alleging that their CSO, Mr. Amitabh Saxena has stolen the bitcoin and is on the run.

This incident seemed to have occurred during an exercise to extract Bitcoin Gold and distribute the same to their customers.

These documents were added to their website:

According to the documents, Mr. Saxena had notified them of a theft of 438.318 BTC during the Bitcoin Gold extraction process. But the Coinsecure team was suspicious of his story. They were even more suspicious as he was a holder of the private keys to the customer funds. After checking their internal systems, they seemed to be convinced of his thievery and had filed a complaint with the Cyber Cell.

FIR Complaint:

While investigations are yet to be initiated by the Cyber Cell, the Coinsecure team has taken responsibility for the loss of their customer funds. They have provided an assurance that they will compensate the losses from their own personal funds.

Bitcoin Gold resulted out of a hardfork on October 24th, 2017 with the intention of replacing the ASICs with GPUs as a more decentralized way of mining for the blockchain. They also replaced the PoW mining algorithm with equihash. The team’s decision of lowering the mining difficulty and post-mining 100k BTG for the sake of funding development efforts didn’t go well with many. It was seen by many as a get rich scheme by the developers. Customers were expecting the forked coins to be distributed to them by the exchanges in proportion to the Bitcoin held by them at the time. The BTG is to be distributed to people who held BTC at the time of snapshot (Oct 24th, 2017 – Block Height: 491407) But the distribution of the coins was to be undertaken by the Coinsecure team post a security review of the BTG blockchain.

Coinsecure has always put the safety of their customer’s funds as a top priority. It is disappointing to see such a turn of events from one of the foremost teams in the Indian blockchain space. This may have put an irreparable dent in customer confidence.

It serves as a bitter reminder to users as well as industry players about the dangers in this space. Any well-versed crypto investor will tell you this: Never hold your money on an exchange. Every exchange is bound for a vulnerability that can lead to loss of funds.

We will continue to post updates regarding this issue. Stay tuned.

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