India police go after hacked crypto exchange

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Police in New Delhi reportedly have filed a case against the Indian cryptocurrency exchange Coinsecure for the theft last April of 438 BTC, now approximately worth $2.8 million, according to the Times of India.

Anyesh Roy of the Cyber Cell division of the Delhi police said they sought assistance from other exchanges where the stolen cryptocurrency was traced to. “Initially, they didn’t give a response, but now we’re in the process of getting the information through mutual legal assistance treaty,” Roy said.

Local police had also sought the help of the International Criminal Police Organization (Interpol) in locating the funds. Currently, the stolen amount has been found to have gone through five cryptocurrency exchanges.

The Times of India noted that the servers and computers of Coinsecure were still being examined, but the evidence so far has confirmed suspicions of the theft being an inside job.

An initial investigation showed that private keys of users, which were kept by Coinsecure and stored offline, had been leaked, resulting in the theft.

The company itself has pointed to its chief security officer Dr. Amitabh Saxena as responsible for the leak of private keys. According to the company, Saxena had been extracting Bitcoin Gold, wherein the private keys were also extracted, leading to the loss of funds.

Coinsecure announced last June that it would be reimbursing those who had lost BTC due to the hack, but only gave four days for people to make claims. The reimbursement plans provided for compensation in Indian rupees rather than virtual currency. The exchange has since stopped its operations.

It will also be recalled that Coinsecure was one of the 16 exchanges that Venezuelan President Nicolas Maduro claimed would offer the national cryptocurrency called the Petro, which itself has had little visibility in spite of it playing a significant role in the Venezuelan government’s economic rehabilitation plan.

The Coinsecure theft had led to more calls for regulation of cryptocurrency exchanges. However, the Reserve Bank of India, which had previously warned of cryptocurrencies’ use for illegal transactions, has recently shown a willingness to better understand it, creating a division for the research of blockchain and other emerging technologies.