Bitcoin exchange Bitfinex was stolen 400 million, trying to negotiate with hackers

On August 2, about $70 million worth of bitcoins were stolen from the Hong Kong-based bitcoin exchange Bitfinex. According to reports, hackers stole 120,000 BTC from the exchange through a multi-signature security vulnerability. The exchange is now trying to contact the hackers and try to get them to return the users' bitcoins.

Negotiating with hackers

The Bitfinex hack this summer shocked the cryptocurrency community. When the attack occurred, the price of Bitcoin plummeted to $480/BTC. Since then, its price has rebounded and the Bitfinex exchange has resumed operations.

After a while, the exchange announced that it would compensate users for their losses by issuing BFX tokens.

However, little information has been released about how to cooperate with the government, or the progress of the investigation. We know that the FBI has taken notice of the attack, as a Massachusetts resident has filed a complaint regarding the loss of $1.3 million in Bitcoin.

There have been many other complaints about the lack of disclosure on the progress of the investigation into the incident. Now Bitfinex appears to be trying to negotiate with the hacker, saying on its blog:

We would like the opportunity to communicate with you securely. We can reach a mutually acceptable agreement to offer you a large bug bounty (paid through a more private central and anonymous method). We have set up a dedicated email address [email protected] for you, and a PGP key (id: 3DDF4814 | fingerprint: E7ED 6B5B 0172 2ECD 7F9D FCBC 6F19 A931 3DDF 4814) which you can also find on this public key server, hoping to establish a secure communication channel with you.

Bitfinex offers anonymous communication

Bitfinex CFO Giancarlo Devasini

The letter was written by Bitfinex CFO Giancarlo Devasini, who said the company understands that the hacker may not be willing to make the communication public. So Bitfinex provided the hacker with some suggestions to mask his/her or the organization's identity. Devasini explained that the hacker can use Tor (the onion network) and anonymous email frameworks to remain anonymous. But to ensure that the communication is legitimate, Bitfinex also provided a public key to be paired with the hacker's private key.

It also provides a communication method for the Bitmessage platform, which is itself a communication platform for the Bitcoin blockchain. If the hacker chooses this communication channel, the discussion between the two parties can be carried out in any of the "2,072 addresses currently holding Bitcoins participating in the discussion."

Devasini said the company was "eager" to hear back from the hackers and that a negotiable price would be offered if discussions could proceed. "Our intent is not to point fingers, blame or make demands, but to discuss an arrangement that we think you will be interested in," he explained.

The probability of negotiation is low

The likelihood that the hacker communicated with Bitfinex, even using the anonymity methods provided by the company, raises questions about whether the hacker was imagining a cat-and-mouse game with law enforcement behind the scenes. If the hacker decided to communicate, he might be interested in what the exchange would offer.

Bitfinex still maintains its promise to compensate users through BFX tokens. It has started the first phase of compensation, but only 1.1812% of BFX tokens have been redeemed so far. The company hopes to negotiate with the person or group who stole the coins, but many people think that hope is slim.