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India's Coinsecure reports theft of Rs 19 crore worth of bitcoins

India's Coinsecure reports theft of Rs 19 crore worth of bitcoins

Bitcoins worth Rs 20 crore were stolen from one of India's top cryptocurrency exchanges.

Late yesterday, Indian cryptocurrency exchange Coinsecure (which now seems like an ironic name) announced that the exchange had lost of some of its bitcoins during an exercize to distribute BTG to its customers. A private key is an integral aspect of bitcoin and altcoins, and its security make up helps to protect a user from theft and unauthorized access to funds.

The FIR also asks the police to confiscate Saxena's passport, saying, "he might fly out of the country soon". In a letter posted on the homepage of its website, Coinsecure says that its system has never been hacked and instead laid the blame exclusively on its chief security officer (CSO), Dr. Amitabh Saxena.

Coinsecure has accused its Chief Scientific Officer Amitabh Saxena of siphoning off the money from the company's wallet and urged the government to seize his passport to stop him from fleeing the country.

According to the TOI report, senior officers of Delhi Police's Cyber Cell confirmed the incident and said the firm, identified as Coinsecure, told them about the theft. "Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys".

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The company tried to trace the hackers, but found that all the data logs of the affected wallets had been erased, leaving no trails about where the bitcoins were transferred. He said, "Private keys should have never been exported online". A case has been registered under the IPC and Section 66 of the IT Act. "It looks like a crime committed intentionally", he added.

According to cryptocurrency exchange Coinome, on Friday, bitcoins were trading at Rs. 4,80,000 or about $7,359, which was well below its worldwide market price of about $7,771.

The police have seized the company's servers and found that the private keys, which are never supposed to be connected to an online system, were not only online, but were there for over 12 hours. "Irrespective of funds being recovered, we re-assure all our customers that you will be indemnified from our personal funds".

The RBI last week banned regulated entities from providing services to users, holders and traders of cryptocurrencies like bitcoin.

The Reserve Bank of India has already dealt a blow to the crytocurrency exchanges, barring banks from facilitating trade on virtual currencies and mandating them to unwind their existing relationship with exchanges within three months.