Coinsecure of India Postpones Repayment of Stolen Money

New Delhi-based cryptocurrency exchange Coinsecure, which recently lost $3.5 million worth of Bitcoin in a hack, has informed its customers that they must wait to be reimbursed.

The prime suspect in the case is the chief security officer of the exchange. Amitabh Saxena was actually the one who reported the theft, but his behaviour in attempting to recover the money did not follow protocol. For example, he saved the exchange’s private key in clear text format. In addition to this, Saxena was the only one who had the key to the exchange’s wallet.

CEO Mohit Kalra said: “As the private keys are kept with Dr. Amitabh Saxena, we feel that he is making a false story to divert our attention and he might have a role to play in this entire incident. The incident reported by Dr. Amitabh Saxena does not seem convincing to us….his passport should be seized so he cannot fly out of the country.”

Saxena was reportedly distributing Bitcoin Gold to customers when the money disappeared. Bitcoin Gold is a spinoff of Bitcoin created through a fork in October 2017. The idea behind the coin is to break up the Bitcoin mining monopoly by making all current mining equipment obsolete. While not everyone agreed with the need for that particular fork, the community ultimately decides if the new coin is legitimate – Bitcoin Gold tokens have a market value of $75 at the moment.

On Friday the 13th of April, the Coinsecure team discovered that 438.318 bitcoins had been stolen. Saxena’s laptop was confiscated for examination.

Three days after the theft the exchange sent a letter to customers which assured them that their rupees were safe and offered a 10 percent bounty for “help rendered for recovery of BTC”. Since then the exchange has been publishing regular letters updating customers of the situation and thanking them for their loyalty. On the 21st, the exchange said that it was beginning the claims process and hoped that by the following weekend compensation would be available.

The latest letter, published yesterday, reads: “When investigations are underway, we don’t have much of a say and do need permissions from the authorities to start the compensation process, which we are yet to receive. We will update you when we have definite dates around the start of the process.”