Incident Of The Week: NiceHash Gets Bad Hack In $70M Bitcoin Theft

Dan Gunderman

In the dynamic world of cyber security, breaches are both tightly guarded and, sadly, imminent.

Combing through data, market research and threat-defense efforts taken by enterprises can be a daunting task. Here at Cyber Security Hub, we both track the latest industry news and make it more navigable for the IT professional. CSHub coverage extends outwards – as it helps enterprises batten down their proverbial hatches.

In this edition of “Incident of the Week,” we examine the NiceHash bitcoin heist – in which hackers infiltrated the digital currency platform and made off with 4,700 bitcoins, worth nearly $75 million in Asia.

In a video statement on Thursday, the company’s CEO Marko Kobal said that at around 1 a.m. the previous day, hackers breached the system using a compromised company computer (credentials of a NiceHash engineer).

Late Wednesday, the Slovenian company opted to suspend its operations for 24 hours due to the nature of the breach. Restorative attempts to bring the system back online are still underway, according to CNN.

NiceHash, whose Twitter profile describes it as the largest crypto-mining marketplace, placed an official statement on its suspended website. Part of it reads: “Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days. In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency.”

Slovenian police told Reuters on Friday that their investigation is ongoing.

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To mine digital coins – the lifeblood of the NiceHash business – complex algorithms are used to harness computer processing power. Bitcoin is the most utilized cryptocurrency.

NiceHash allows users to mine for other cryptocurrencies (“altcoins”) and get paid out in bitcoin. Often, that is a large amount. Since its founding four years ago, the company has reportedly delivered $1 billion.

Just this week, news broke that Bitcoin’s value had skyrocketed – to $17,000. Following news of the NiceHash heist, Bitcoin fell on the Bitstamp exchange to $14,500.

With hopes of tracking or recovering the stolen money, NiceHash has informed other exchanges and mining sites.

The company said that because of the security measures in place and the way the hack was executed, the cyber-thieves appear to be sophisticated.

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The statement said that funds inside the NiceHash Bitcoin wallet were stolen. It’s unclear if any user funds were affected.

To ensure the attack does not escalate further, NiceHash wrote, “While the full scope of what happened is not yet known, we recommend, as a precaution, that you change your online passwords.”

The company’s head of marketing, Andrej Skraba, told Reuters Friday that it “was probable” that the attack was delivered from an IP address “outside of the EU.”

NiceHash concluded its statement by writing, “We are truly sorry for any inconvenience that this may have caused and are committing every resource towards solving this issue as soon as possible.”