Chinese Exchange BTER Can’t Repay Customers After 7170 BTC Stolen

No longer operative China-based cryptocurrency exchange BTER is unable to repay all its clients, following an alleged $1.75m loss.

On February 15, the Chinese exchange stopped functioning publishing a statement via its website which claimed that 7,170 BTC had disappeared from its cold wallet.

The announcement has been published when a number of the BTER customers paid attention to some elite transactions moving from Bter’s cold wallet to a random Bitcoin wallet address. After their successful completion, the amount was further transacted to another wallet.

The thread on Reddit reads that some users are convinced that the hack was an insider job. User SmoothSloth says that “it is nearly impossible for a hack of this size to occur given the advent of Multi Signature and Multi Factor Authentication.”

“Like most hacks that have occurred since Mt. Gox, it is a result of criminal negligence.”

BTER has reported the theft to the local authorities and has been working with investigators to retrieve the stolen digital currency.

Also, the exchange has been preparing for the withdrawals; on its Weibo page the company stated that the first coins available for withdrawal would be NXT, counterparty (XCP), and recently added tilecoin (XTC).

We are preparing for the withdrawals. CNY, USD and NXT withdrawals will be handled first.
— Bter.com Exchange (@btercom) February 21, 2015

Though, the company suggested that it was looking to liquidate assets, including BTER.com domain, to compensate customers. Unfortunately, it’s still unclear whether the company’s customers are going to be repayed or not.

We are seeking all ways to compensate our users including selling http://t.co/nsX4sStHiR (Debits & funds not included): admin@mail.bter.com
— Bter.com Exchange (@btercom) February 18, 2015

Last year, BTER lost 51,670,000 Nextcoins, worth about $1.65 million at the time, in another hacking attack. It’s worth mentioning that the hacker gave back some of the stolen funds after negotiations.

Concerning a recent hacking, the company announced a 720 BTC reward to anyone who can recover the bitcoins having tracked down the thief.  Actually, it can be difficult to recover the funds in that way, as “several blockchain explorers have revealed that the bitcoins have likely already been sent through anonymization services, called Bitcoin mixers,” reports Bitcoinist.net. Still, according to the company’s statements, the bounty for vigilante hackers willing to “chase back” the stolen funds, remains on the table. In addition, the company claims to have received a lot of useful information from its users.

BTER also noted that the company keeps monitoring the movement of the stolen funds via the blockchain.

Source : Coinspeaker