Cryptocurrency exchange Gatecoin hacked, $2m in Bitcoin and Ethereum stolen

Hong Kong based Bitcoin and cryptocurrency exchange Gatecoin Ltd. has revealed that it was hacked last week with the loss of some 15 percent of total crypto-asset deposits they held.

Founder and Chief Executive Officer Aurélien Menant explained in a notice on the Gatecoin main page that upon discovering the breach May 13, they immediately suspended all services.

“On Friday night HKT, May 13, we detected some suspicious transactions and immediately suspended our services to investigate, and to prevent any more unauthorized access to the ETH and BTC hot wallets.”

“We have previously communicated the fact that most clients’ crypto-asset funds are stored in multi-signature cold wallets. However, the malicious external party involved in this breach, managed to alter our system so that ETH and BTC deposit transfers by-passed the multi-sig cold storage and went directly to the hot wallet during the breach period. This means that losses of ETH funds exceed the 5% limit that we imposed on our hot wallets.”

“In total, the hot wallet breach resulted in the loss of ETH 185,000 and BTC 250, which is equivalent to USD 2 million. This represents 15% of total crypto-asset deposits held by Gatecoin.”

Recovery

Menant addressed customers concerned about being able to access their funds by promising that a bespoke platform that will allow all clients to withdraw their remaining funds in BTC, DAO, DGD, REP, USD, EUR and HKD will be released on May 28, however a date for ETH withdrawals is not yet available.

“All DGD, REP and DAO funds are secure and Gatecoin has funded the DAO contracts for DAO token holders. 5% of all BTC funds were compromised in the breach, but 95% remain stored in multi-sig cold wallets along with the remaining crypto-assets,” he noted before adding “All fiat currency funds held in USD, EUR and HKD are secured in segregated client accounts and can be withdrawn by clients after May 28, 2016.”

Far too many dubious Bitcoin exchanges have claimed they have been hacked previously, but unlike those Gatecoin is a fully regulated exchange and was supported by the Hong Kong Science and Technology Parks Corporation, a statutory body of the Hong Kong Government; suffice as to say they are a legit company with support from the Hong Kong Government, so there is no reason to doubt their hacking story.

We wish Aurélien Menant and the Gatecoin team the best of luck in trying to recover the funds going forward.

Image credit: Gatecoin/ screenshot

 

  • About
  • Latest Posts
Duncan Riley

Duncan Riley

Duncan Riley is a senior writer at SiliconANGLE covering Startups, Bitcoin, and the Internet of Things.

Duncan is a co-founder of VC funded media company B5Media and founder of news site The Inquisitr, and was a senior writer at TechCrunch in its earlier days.

Tips? Press releases? Intersting startup? email: duncan@nichenet.com.au or contact Duncan on Twitter @duncanriley

Duncan Riley

SIGN UP FOR THE SiliconANGLE NEWSLETTER!

Join our mailing list to receive the latest news and updates from our team.

SIGN UP FOR THE SiliconANGLE NEWSLETTER!

Join our mailing list to receive the latest news and updates from our team.

mm

TheBitcoinNews.com – leading Bitcoin News source since 2012

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.