By Elton Gomes
On Friday, approximately 438 bitcoins worth about Rs 20 crores were stolen in what is being termed the biggest cryptocurrency theft in India.
Here’s what happened
A Delhi-based cryptocurrency firm – Coinsecure – stated that it has lost 438.3 bitcoins that belonged to its customers and lodged an FIR against its Chief Security Officer (CSO) Amitabh Saxena. The company has accused Saxena of syphoning off the money from the firm.
The firm which is run by Secure Bitcoin Traders Pvt. Ltd told its users in a statement, “We regret to inform you that our Bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control.”
Coinsecure refused to give out the exact number of those affected, but it said that the company will compensate those who will be at loss. The company learned of the theft on Monday while going through its wallets. A senior security officer found that all bitcoins stored offline had disappeared.
Although the company tried to trace the perpetrators, the data logs of the wallets affected had been erased and the perpetrators did not leave any trail of where the bitcoins were allegedly transferred to.
What is bitcoin?
The alleged cryptocurrency theft comes a week after the RBI (Reserve Bank of India) barred entities from doing business with an individual or a company dealing with cryptocurrencies.
As bitcoin’s value surged through the roof, many were sceptical of investing in it, whereas others quickly prepared to jump on the bitcoin bandwagon.
Bitcoin was created in 2009 and it exists online, only online. There are no notes and coins. Another important fact to take note of is that Bitcoin is not regulated by any state. It does not have a centralised bank.
The Indian finance ministry warned users against investing in cryptocurrencies like bitcoin. The ministry said that cryptocurrencies are not considered as legal tender and that these currencies are not protected.
Why you should care
When dealing with an ambiguous digital currency like bitcoin, it is crucial to understand each and every aspect of what bitcoin is. The concerning fact about such a digital currency is that perhaps even bitcoin traders are not aware of what the digital currency fully entails. Technically, bitcoin trading is allowed in India because there are no laws to disallow it.
India’s finance ministry stated that investing in digital currencies could leave an individual vulnerable to hacking. As bitcoin is stored digitally or electronically, persons trading in bitcoin can become victims of hacking, malware attack, loss of password. A malware attack can result in loss of online security and money.
Amit Bhardwaj – mastermind of India’s largest bitcoin Ponzi scheme of Rs 2,000 crore- was recently arrested by Pune Police at the Delhi airport. Prior to his arrest, Bhardwaj was speaking at an Assocham event, where he ironically said, Trust is the keyword you dont have to trust a human being to take decisions on your financial systems.