Ideally, not every hacks end in total tragedy. The recent instance is NiceHash which is the Slovenian Bitcoin-mining marketplace. NiceHash made an announcement to reimburse their clients 60 percent of the lost 4,700 Bitcoin that was stolen back in December 2017.
In December 2017, the company has adjourned their operations after $64m worth of Bitcoin was hacked. However, the investigation in this hacking case is still under process.
The Story behind the NiceHash Hack
NiceHash was one amongst the cryptocurrency marketplace that has shown expected results. This was especially for users seeking to save processing time required for miners to validate the transactions of bitcoin users in exchange for Bitcoin.
However, while the site was facing issues and complaints, bitcoin owners started sharing panicked comments via social media accounts of NiceHash.
Looking at complaints, NiceHash delayed their operations since last year, meanwhile investigating the breach. According to the company, it was operating with law enforcement as a matter of urgency while recommending users to modify their passwords.
The head of marketing at NiceHash, Andrej P Škraba says in the official statement,
The recent hack was the highly professional attack with sophisticated social engineering. NiceHash faces the loss of approx. 4,700 Bitcoin worth of $63.92m at present prices.
We understand that you will have a lot of questions, and we ask for patience and understanding while we investigate the causes and find the appropriate solutions for the future of the service.
According to the NiceHash, this incident took place shortly after the platform announced on Reddit:
Our payment system was compromised, and the contents of the Nicehash Bitcoin wallet have been stolen. We are working to verify the precise number of BTC taken.
NiceHash went offline for two weeks after the wake of the attack. However, just after the attack, the co-founder at NiceHash, Marko Kobal resigns his position as the CEO of the company. He also said in a LinkedIn post that now he would allow new management to take a lead in the organization for its next coming growth.
The Reimbursement Plan
NiceHash made a declaration about the reimbursement plan just two weeks after the attack by messaging members of its platform. Although balances were not clear about the initial date:
We are happy to announce we have been able to reserve the funds required to restore balances from a group of international investors. Old balances will, therefore, be restored by January 31, 2018.
Also, on 31st January 2018, NiceHash posted using its Twitter handle:
The news you’ve all been waiting for ? https://t.co/KfQ8HDvhTx ?
The Repayment program will start on Friday, February 2, 2018, and will initially reimburse 10% of the old balance amount to all users that were impacted by the security breach.
— NiceHash (@NiceHashMining) January 31, 2018
They also stated about the commitment to periodically repay rest of the amount to respective users in the few months.
According to the repayment program details, NiceHash splits up repayment scheme into two partitions.
- The internal wallet affected users in the breach
- The external wallet affected users in the breach
On 2nd February 2018, the Repayment program initiative for reimbursement was made for 10% of old balance amount to respective users affected by the security breach.
Every individual user will get entire reimbursement at the same time, under similar conditions. Each new reimbursement program part is announced in advance. However, users can check out the repayment progress.
Regarding any user notices that was not received considering respective payment, they were asked to instantly notify NiceHash to get back their payment. The old balance is going to be repaid in terms of Bitcoin (BTC), rather than fiat value or cryptocurrency.
With regards to the hack investigation, NiceHash notifies in the same update saying,
The investigation on the security breach is still ongoing, with the support of international law enforcement and cyber forensic teams, and while we want to be as open and transparent as we can, for reasons of ongoing investigation we can’t provide many details at this time. We are in active discussions with investors, but this process will require more time and due diligence than originally anticipated.
60 percent reimbursement is already done. NiceHash is looking to clear out dues entirely in the coming few months.