Crypto exchanges have different responsibilities to their clients. In the case of a hack or theft, they need to refund their customers. Coinsecure, an Indian Bitcoin trading platform, will do exactly that. The recent theft affecting several users forces the company to reimburse victims out of their own pocket.
The Coinsecure Theft Investigation
Coinsecure was recently hacked by an unknown assailant. During this theft, the company lost 438.318 Bitcoin, valued at around $3.3 million. This money has been taken from the company’s Bitcoin wallet. Rumor has it this may have been an inside job by company CSO Dr. Amitabh Saxena.
Official complaints registered with police authorities clearly implicate Saxena as the culprit. It is unclear if there is any evidence to make those charges stick. With the money still not being located, the investigation will continue for some time to come. Coinsecure even announced a 10% finder’s fee to its community for anyone who can help recover the money in question.
Given Bitcoin’s lack of privacy and anonymity, finding the money should not be difficult. That is, assuming the money has not been converted to another cryptocurrency with anonymity features. Additionally, the money may have already been converted to fiat currencies. For now, the attempt to recover the funds is still in full effect.
Repaying Affected Customers
While this process takes place, Coinsecure has made it clear they will reimburse customers in one way or another. Option one is more favorable as it would result in the stolen money being returned. If that were to happen, customer balances will be corrected by the exchange automatically. The other option will work as follows:
“However, if recovery of siphoned BTC is not possible, then we will apply the lock in rates as of the 9th of April, 2018. 10% of the Coin Holding Balance will be refunded in BTC and 90% will be returned in INR.”
It is not the first time a cryptocurrency exchange gets hacked and fails to retrace the funds immediately. Earlier this year, Japanese firm Coincheck went through a similar problem. They also refunded customers out of their own pocket while the investigation was still ongoing. This further confirms cryptocurrency exchanges are maturing and have sufficient liquidity to deal with such incidents.
Image from Shutterstock