Technology |Emerging

Cryptocurrency site NiceHash confirms hack

NiceHash, a cryptocurrency mining marketplace, confirmed that its security has been breached and “the contents of the NiceHash Bitcoin wallet have been stolen.” Its users said in online forums that their balances are zero and that more than $60 million was moved to a Bitcoin wallet on December 6. 

CEO Marko Kobal and co-founder Sasa Koh appeared on a Facebook video  to address users’ concerns. Kobal said the hack was made by using the credentials of a NiceHash engineer and that they’re conducting a forensic investigation with law enforcement. He added that more information will be given in the coming days.

Reuters also reported that NiceHash head of marketing Andrej P. Škraba said that the hack was “a highly professional attack with sophisticated social engineering.”

Nervous users first began speculating about a possible hack on Reddit and Twitter after the site said it was down for maintenance that morning.

Later in the day, WikiTribune was in contact with company adviser Andrej Nabergoj, who said that NiceHash was “assessing the situation and working with the authorities.” WikiTribune initially identified Nabergoj as CEO, but he subsequently clarified his position.

A press release from NiceHash was later posted on Reddit and Twitter, which said that the company’s security has been breached.

NiceHash is a place for users to buy “hashing power,” that is computing power for mining different cryptocurrencies such as Bitcoin. On Thursday, the price of Bitcoin surged to $15,000.

Cryptocurrencies are digital assets that run on a technology called blockchain – a decentralised ledger that allows for anonymous and secure peer-to-peer transactions. Mining is the process of adding transaction records to the blockchain.

More than $60 million from NiceHash users has apparently been moved to a single external wallet pointing to this address.

This security breach of NiceHash makes it one of the biggest cryptocurrency breaches ever. The biggest hack was in 2014, when Mt. Gox, then the world’s largest Bitcoin exchange, lost $460 million, as reported by Wired. The second biggest breach of a Bitcoin exchange platform was Bitfinex in 2016, which had $77 million stolen.

The company’s first tweet regarding maintenance was posted early December 6, and it posted another four hours afterwards, which only added to the concerns expressed on social media by people identifying themselves as NiceHash customers. Users on the Reddit page also said that the company stopped responding to support queries around a day or two ago.

We have no ads and no paywall. If you believe in collaboration to produce quality neutral journalism for everyone, it is important that you sign up to support our work financially. Every penny goes towards improving WikiTribune!
Thanks, Jimmy Wales

Support us

Talk (7)

Linh Nguyen

Linh Nguyen

"Good points Darrin. Actually, if you ..."
DW

Darrin West

"I’m almost every story on cryptocur..."
JG

Joel Gallant

"Thanks Linh. This is a really inte..."
Linh Nguyen

Linh Nguyen

"Thanks Joel. An explainer on how wall..."

Author

United Kingdom
Linh is a staff journalist at WikiTribune with a background in the humanities. She covers the Middle East, Asia, conflict and technology. Though based in London, she has freelanced across Asia, the UK and U.S.

History for Story "Cryptocurrency site NiceHash confirms hack"

Select two items to compare revisions

  1. Time Contributor Edit
  2. SB Steve Beatty (Contributions | Talk) edit new facebook graf
  3. SB Steve Beatty (Contributions | Talk) fixing day/date reference
  4. SB Steve Beatty (Contributions | Talk)
  5. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  6. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  7. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  8. Lydia Morrish Lydia Morrish (Contributions | Talk) Fixed formatting
  9. BW Burhan Wazir (Contributions | Talk)
  10. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  11. Linh Nguyen Linh Nguyen (Contributions | Talk) added reuters quote, added examples of other hacks
  12. SB Steve Beatty (Contributions | Talk)
  13. SB Steve Beatty (Contributions | Talk)
  14. SB Steve Beatty (Contributions | Talk)
  15. SB Steve Beatty (Contributions | Talk)
  16. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  17. SB Steve Beatty (Contributions | Talk) clarifying role as not CEO
  18. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  19. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  20. Linh Nguyen Linh Nguyen (Contributions | Talk) added link
  21. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  22. BW Burhan Wazir (Contributions | Talk) edited - added line about cryptocurency breaches
  23. BW Burhan Wazir (Contributions | Talk) editing
  24. BW Burhan Wazir (Contributions | Talk) editing
  25. Linh Nguyen Linh Nguyen (Contributions | Talk) update
  26. Linh Nguyen Linh Nguyen (Contributions | Talk) DRAFT

Talk for Story "Cryptocurrency site NiceHash confirms hack"

Talk about this Story

  1. I’m almost every story on cryptocurrency hacks, there is a failure to distinguish between the underlying block chain vs the exchange. It is not possible to steal from an unwilling owner, unless you acquire their wallet password and their key (guarded by their password). Smart owners follow recommended security protocols and keep that info very secret and should keep the key physically secure, perhaps in and offline usb device. When newsworthy theft occurs, I bribe it is universally due to hacking if a central exchange. Naive users will 1) transfer a balance from their personal wallet to the exchange’s wallet, 2) will register their key with the exchange. The motivation is convenience. Instead of eneterimg their password and attaching their key for every trade, they rely on the exchange’s security protocols. And can get ripped off. Someone can break website security, or use admin credentials to harvest the 1) centralized coin or 2) the centralized keys and then grab all coins from each user. If users followed the recommended security protocols and eschewed the supposed convenience, the exchange’s security weaknesses would not expose the users to theft.

    I am a software engineer, a reader of crypto theory, and not a user of crypto currency. I see the potential for ma y cryptocurrencies. It concerns me that the public might distrust the underlying technology (the block chain), when problems are being caused almost universally by exchanges, both intrinsically due to centralizing of security and specifically due to particular lapses.

    1. Good points Darrin. Actually, if you read our follow-up interview with the CEO, we managed to get a quote from a user who got hacked who said essentially the same thing: that the hack is a failure of the company, not a failure of the underlying system. You can read it here: https://www.wikitribune.com/story/2017/12/11/technology/nicehash-ceo-speaks-out-after-60m-cryptocurrency-hack/27212/

      But we’ll try harder to make that clearer since you’re right that what gets hacked are typically exchanges.

  2. I haven’t jumped into the whole cryptocurrency as of yet, but this is the part that makes me nervous.

    I know that this isn’t the first theft of Bitcoin or other Cryptocurrency; however, how do we move to protect those investments when it’s decentralized and such?

    1. Thanks. Good points. We aim to do a lot more on this area. Your ideas are welcome.

      1. I know that WT wrote a great article on blockchain and such, but I think having a better understanding of how wallets work would be great.

        When I first started researching wallets and I never realized that a wallet wasn’t the same as a wallet that you carry in your pocket. For example, some can only hold Bitcoin while some can hold multiple currencies.

        The other thing is there only seems to be discussion around Bitcoin in the world. I’ve read articles, including here on WT which says that there could be as much as a thousand different cryptocurrencies.

        Cryptocurrencies are certainly interesting and I’m interested in seeing where they will lead and take us in the future.

        1. Thanks Joel. An explainer on how wallets work is a good idea, I’ll see what I can do.

          And yes, Bitcoin is the most well-known because it was the first cryptocurrency. Others worth checking out are Ethereum, Dash and Bitcoin Cash. But there are thousands.

          1. Thanks Linh.

            This is a really interesting topic and I think it’s going to change the economy; however, I’m not sure if it’s going to be for the positive or negative yet.

Subscribe to our newsletter to receive news, alerts and updates

Support Us

Why this is important and why you should care about facts, journalism and democracy

WikiTribune Open menu Close Search Like Previous page Next page Back Next Open menu Close menu RSS Feed Share on Facebook Follow us on Twitter Follow us on Instagram Follow us on Youtube Connect with us on Linkedin Email us Message us on Facebook Messenger Save for Later