Coinsecure Exchange Remains Closed After Losing All of Its Bitcoins

Coinsecure Exchange Remains Closed After Losing All of Its Bitcoins

Indian cryptocurrency exchange Coinsecure has remained closed, after a hack on 9 April led to a loss of over BTC 438 worth usD 3.3 million at the time. Coinsecure bought and sold Bitcoin against the Indian Rupee (INR).

Its chief security officer, Amitabh Saxena, claimed that the Bitcoins were stolen when he was extracting Bitcoin Gold to distribute to customers. He had saved the private keys in plain text format and was online during the extraction process, which was against standard security protocol, considered very risky when dealing with such large amounts of bitcoin. All of the Bitcoins were transferred to a single wallet address.

The parent company of Coinsecure, Bitcoin Traders Pvt Ltd, however, doubted Amitabh Saxena’s story and suspected intentional theft. It filed a complaint stating this on 10 April to police unit Cyber Cell and requested that Saxena’s passport be revoked so he could not flee the country.

Coinsecure is now sending emails to customers to facilitate the distribution of refunds. Customers have been told that they would be compensated with locked-in rates from 9 April, at a ratio of 90% INR to 10% BTC. According to Coinsecure, authorities have made the refund process very slow since the investigation is ongoing; direct permission from the police is required before any refunds can be sent.

It is not clear whether Coinsecure will ever re-open. If the stolen funds are not recovered, they will likely have to go into bankruptcy.

Coinsecure made news earlier this year by negotiating with the Venezuelan government to be the main exchange for state-backed crypto Petro. This was a risky decision since the president of the United States, Donald Trump, signed an executive order on 19 March, making all Petro dealings illegal. Therefore, Coinsecure could not legally operate in the United States anymore.

The close timing between Petro being made illegal and the Coinsecure exchange being compromised and shutdown raised suspicion in some observers that these events were related.

 

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