BTER Unable to Repay Customers Following Alleged Exchange Heist

Defunct cryptocurrency exchange BTER claims it doesn't have enough funds to reimburse all its users, following an alleged $1.75m hack.

Feb 20, 2015 at 8:50 p.m. UTC
Updated Sep 14, 2021 at 2:02 p.m. UTC

Defunct cryptocurrency exchange BTER claims it doesn't have enough funds to reimburse all its users, following an alleged seven-figure hack.

The Chinese exchange closed earlier this week, issuing a statement via its website that 7,170 BTC had disappeared from its offline wallet – around $1.75m at press time.

Speaking to CoinDesk, a BTER spokesperson claimed CNY and USD withdrawals would resume within a week. However, the company said it is still exploring different options to make all its customers whole, including selling the platform.

"Hopefully a qualified party (especially a trusted security team) will take charge of it in the future," the spokesperson said.

Second hack in six months

Twitter users expressed disappointment and suspicion following the closure, which marks the exchange's second high-profile breach in six months. In August BTER lost 50m NXT, then worth around $1.65m, which, according to reports, was partially returned following negotiations with the hacker.

This time, reimbursement of the platform’s various cryptocurrencies, including NXT and counterparty, remains uncertain. The spokesperson simply reiterated the company's earlier Twitter announcement that withdrawals would be running "soon", after BTER's wallets are declared safe.

The individual did not provide further clues as to how the company's cold wallet was allegedly compromised, adding only that "the trading platform was never affected but we need to make sure the wallet environment is safe for withdrawals".

Vigilante bounty

According to its Weibo post, the exchange has reported the incident to local authorities. Additionally, the company said a 750 BTC bounty is on the table for vigilante hackers willing to "chase back" the stolen funds, which the exchange claims documented in this transaction.

The spokesperson said BTER's team were following up a number of bounty hunters' leads: "Got a lot of useful information from our users. We are working on it."

If verified, the BTER hack is the second biggest this year, following the £5.1m that vanished after Bitstamp’s hot wallet was compromised in January.

Hong Kong company MyCoin, which made headlines this month with rumours of a possible $386.9m hack (over 10% of bitcoins currently in circulation), is now believed to be a ponzi scheme that did not hold digital currency at all.

Wallet image via Shutterstock.

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