Indian exchange platform Coinsecure suffered the worst cryptocurrency theft in the country’s history this week, with 438 Bitcoins syphoned out of user accounts into an address outside of the platform’s control. This was the equivalent of approximately USD 3.5 million.

The International Business Times reported that the theft came to light when users began complaining they could not access their funds over several days. The Coinsecure website issued an official notice on 12 April, assuring users that a First Information Report (FIR) with the Cyber Cell of Delhi had been filed and that they were working to recover all of the lost funds.

The notice outlined details of the apparent hack, noting that it appeared to occur when its chief security officer (CSO), Dr Amitabh Saxena, was extracting Bitcoin Gold. Dr Saxena claimed that the funds were ”lost in the process during the extraction of the private keys”.

Suspicious circumstances

As it is only the CEO and the CSO that maintain access to the private keys of the company’s wallet., this makes the circumstances behind the extraction particularly suspicious, leading the exchange to believe that the CSO created the story to cover up his own theft.

The FIR outlines their accusation, stating, ”The incident reported by Dr Amitabh Saxena does not seem convincing to us. The exchange in the FIR requested the authority to seize Dr Amitabh Saxena’s passport so he cannot fly out of the country.”

A second update on the Coinsecure website assured users that their Indian Rupee (INR) funds were safe, calling on members of the Bitcoin community for any information that could help secure the return of funds.

Crypto fraud in India

The last few months have seen several cases of similar fraudulent behavior in India. The founder of cryptocurrency investment fund Gainbitcoin was arrested earlier this month for allegedly scamming victims out of USD 300 million. The year to date has seen USD 670 million worth of cryptocurrencies stolen through fraudulent activities.

Investors are encouraged to put in research before parting with funds to protect themselves from such scams. It is important to ensure that platforms used are secure, with KYC policies being preferable. Due to the decentralized nature of cryptocurrency trading, it is often very difficult to recover stolen funds.

 

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