Bitcoins worth Rs 22 crore stolen from Delhi-based cryptocurrency exchange, company accuses own officer

LocalBitcoins | This peer-to-peer exchange allows people from different countries to exchange their local currencies to bitcoins. Users post advertisements on the exchange stating their exchange rate and preferred payment method for buying or selling bitcoins. By replying to these advertisements, a trade is opened and escrow protection is automatically activated. Escrow protects both buyer and seller, by keeping the bitcoins safe until the payment is done and the seller releases bitcoins to the buyer. Bitcoins are placed in LocalBitcoins web wallet from where one can pay for their bitcoin purchases directly. However, investors need to be aware of scams as they are dealing directly with other people unlike other stock-like exchanges or centralized bitcoin trading sites.

Delhi-based bitcoin exchange Coinsecure has lost bitcoins worth around Rs 22 crore in a security incident on Monday. The company has registered an FIR with the cyber cell of Delhi Police in this regard and has accused its Chief Security Officer to have a hand in it.

Informing its customers, the company said that 438.318 bitcoins were allegedly stolen from its wallet by attackers. Coinsecure said that the incident happened while extracting bitcoin gold (BTG) to distribute among its customers.

“The current issue point towards losses caused during an exercise to extract BTG to distribute to our customers. Our CSO, Dr Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during an extraction of the private keys,” the company said.

The company in the FIR lodged with the Delhi Police said that since the private keys to the wallet are with Saxena, he might have a role in the alleged crime.

“As the private keys are kept with Dr Amitabh Saxena, we feel that he is making a false story to divert our attention and he might have a role to play in this entire incident,” Coinsecure alleged. “The incident reported by Dr Amitabh Saxena does not seem convincing to us.”

In the FIR, the company’s CEO Mohit Kalra said that it fears that Saxena might fly out of the country and urged the Delhi police to seize his passport.

“We are working round the clock to restore services and to try and recover all of the lost funds, and we shall keep all our users posted on the outcome of the details to ensure utmost transparency,” the company said.

It asked its customers to stand by it and provide help and support in the hour of need. It assured that all its customers who have been affected by the incident will be compensated for their loss from Coinsecure’s personal funds.