Indian Cryptocurrency Exchange Coinsecure Says Head of Security Lost $3.5 Million

April 13, 2018 9:12 pm Published by
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The Indian cryptocurrency exchange Coinsecure posted a message on its website on Thursday which said it lost over $3.5 million at the fault of its head of security, according to CNBC. 

The company said that Chief Security Officer Amitabh Saxena was extracting a cryptocurrency called bitcoin gold in order to distribute it out to customers, but somehow the funds were lost in the process.

Director Mohit Kalra sent a letter to Indian authorities about the incident and said that 438.318 bitcoins have gone missing, which is nearly $3.5 million at Friday’s bitcoin price according to CoinDesk. 

Coinsecure users’ funds were stored in a secure bitcoin wallet and the private keys were kept by Saxena and Kalra, which are required to send cryptocurrency out of a storage wallet and allows the holder to move money. 

“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 letter written by Kalra said on the company website. 

“The incident reported by Dr. Amitabh Saxena does not seem convincing to us. Dr. Amitabh Saxena also has an Indian passport and he might fly out of the country soon. Therefore, his passport should be seized so he cannot fly out of the country.”

CNBC contacted the Cyber Crime Cell department of the Delhi police department where Kalra sent the letter, but there has been no response as of Friday afternoon. 

Coinsecure said that it is attempting to recover the lost funds and promised to reimburse customers using the company’s personal funds. 

CNBC reached out to the company for more information about when that process would begin and if the company had any contact with Saxena, but a spokesperson only pointed to the statement posted online.

The massive loss is one of the first major issues on an Indian cryptocurrency exchange, but a number of other exchanges in countries have already faced similar issues.

Recently Coincheck, a cryptocurrency exchange in Japan, had over $500 million worth of cryptocurrency stolen. 

Delhi’s police department website warns against people becoming involved in cryptocurrencies since there is an “absence of legal framework.” 

“These currencies are normally used by criminals operating on the dark web or the hidden web. Legal, bonafide businesses do not normally use bitcoins. Therefore any request for business transaction in bitcoins should raise suspicious and should be avoided,” the police department said.

India’s central bank recently took the steps to ban regulated financial institutions in the country from dealing with cryptocurrencies.

WN.com, Maureen Foody

 


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