Bitcoin exchange have been the target of hackers and malicious individuals throughout 2015, and just when we thought things had settled down a bit, a new disaster struck. Popular Bitcoin exchange Bitfinex’s hot wallet has been breached, potentially leading to a loss of customer funds. Let’s review what happened, shall we?
Bitfinex Hot Wallet Breach
Late Friday night, the Bitfinex blog mentioned a potential compromise of the Bitcoin exchange’s hot wallets. Even though Bitfinex stores 99.5% of all funds in multi-signature cold storage, the remaining 0.5% is kept in a hot wallet at all times, making it vulnerable to attack. Taking into account that Bitfinex is the largest Bitcoin exchange in terms of USD trading volume, 0.5% is a significant amount.