NiceHash Marketplace Hacked, Loses $64 Million in Bitcoins

Slovenia-based cryptocurrency-mining marketplace NiceHash confirmed that its website was breached and payment system compromised, with the contents stored in its Bitcoin wallet stolen. The losses reportedly amount to nearly 4,700 bitcoins, or US$64 million.

NiceHash posted a statement on its website addressing the incident. “Unfortunately, there has been a security breach involving NiceHash website. We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours.”

NiceHash allows users to buy and sell hashing power needed to mine cryptocurrency, which members can store in external or local BitGo wallets. The extent and impact of the incident are yet to be known or fully disclosed, but it means members stand to lose the cryptocurrency they’ve mined or accumulated through NiceHash.

[Security 101: The Impact of Cryptocurrency-Mining Malware]

NiceHash’s hack comes at the heels of cryptocurrency’s all-time highs in popularity and value. Bitcoin’s price, for instance, has already surpassed the $14,000 mark. This presents opportunities for miners, poolers, and investors alike, given cryptocurrency's increasing adoption among businesses and public organizations.

Unfortunately, the increasing popularity and value of cryptocurrencies like Bitcoin also make them profitable targets for cybercriminals, as exemplified by the surge of cryptocurrency-mining malware.

This year, we’ve seen a variety of miners using different techniques to steal the infected system’s resources to mine cryptocurrencies—from employing worms and malicious Android apps and zombifying home routers to using social engineering lures like tech support scams. One even used EternalBlue to propagate filelessly. More recently, the Quant Trojan was reportedly updated to be able to steal cryptocurrency wallet credentials. It was also sold as MrRaiX and DamRaiX in Russian underground forums that doubled as a distributor of an information stealer and ransomware.

[By the Numbers: Are Your Smart Home Devices Being Used as Cryptocurrency Miners?]

Cybercriminals and hackers aren’t just limiting themselves to stealing from digital wallets. They’re now also setting sights on the platform’s infrastructure itself or its conduits for higher returns. Last July, South Korean cryptocurrency exchange Bithumb was hacked, resulting in the theft of personally identifiable information of over 31,000 of its customers.

A month after, hackers netted around $500,000 worth of ether (a cryptocurrency under the Ethereum platform) from the Enigma cryptocurrency exchange after they hacked its website and sent spam emails to its community members. In June 2016, a vulnerability in Ethereum’s Digital Autonomous Organization (DAO) allowed hackers to siphon $50 million worth of ether. In late November, a €100,000-bitcoin heist was perpetrated by cyberthieves in Austria, stealing from the unwitting victim while he logged into his account over an unsecured Wi-Fi connection.

[Protecting Home Networks: Start by Securing the Router]

Miners, everyday users, and organizations alike can adopt best practices to mitigate the impact of cryptocurrency-related threats. Among them: adding additional layers of security to accounts and third-party services (i.e., two-factor authentication), proactively monitoring the network for any suspicious activity, and being aware of socially engineered scams. Cryptocurrency miners can consider using “cold storages” (keeping the bitcoin reserve/fund offline) as a precaution when dealing with sizeable amounts of cryptocurrency.

Regarding NiceHash’s hack, the company’s press release said, “Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days. In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency.”